Reducing Your Taxes With A Boat Donation Tax Deduction

Most people already know that giving a charitable donation will provide them with the benefit of being able to claim a tax deduction that would result in a decrease in their federal taxes. Of course, the primary purpose of giving a donation to charity is to help other people. Nevertheless, knowing that you will be able to pay lower taxes is also a good motivation. But donors also need to consider a number of factors before they can claim such a deduction.

Steps to Take Before Going for a Boat Donation Tax Deduction

1. Make sure you are ready to part with your boat. Oftentimes, those who are considering the possibility of selling their boats may end up choosing to donate boat instead after realizing the difficulties of selling it.
2. Make a short list of charities to whom you can donate your boat to.
3. Compare the various charities in your list based on whether they are appropriately registered and whether they are efficient enough in the use of donations.
4. Determine the fair market value of your boat as this will give you an idea of the amount you may be able to deduct from your taxable income as a result of your donation.
5. Contact the charity that you have chosen.
6. Coordinate with the charity how the boat will be transported from where it is stored to the charity.
7. Consult with a tax consultant on the proper filing of your tax return when claiming your donate a boat tax deduction.

Investigating the Charities in Your Short List

When trying to pick a particular charity to donate your boat to, the first thing you need to look into is its reputation. A simple search online can provide you with some insights on whether a charitable organization is trustworthy or not. In addition, you also need to ensure that it is 501(c)3 registered, which it must have or else the IRS would not allow you to claim that boat donation tax deduction. Then confirm with the charity on how they will pick up the boat and what they plan to do with it. And lastly, make sure that they provide you with a tax receipt.