Donate Car Tax Deduction Info
How much donate car tax deduction?
If you itemize your tax returns each year, you can file for a donate car tax deduction. Here are some points to keep in mind when you are seeking a charity to donate a car. Tax Deduction rules from the IRS state that the amount you can claim in your tax returns is the gross value achieved for the vehicle when it is sold at auction.
As the donate car tax deduction is reliant on the gross price achieved from the sale, try to select a charity that specialises in selling the vehicles it receives in the retail market, as obvioulsy, cars that are sold off wholesale will achieve a lower price. Naturally, the charity will try hard to ensure your vehicle attains the best price – as it is in their best interests to obtain the valuable funding for their good cause – and they will be aware the donate car tax deduction is of benefit to the donor too.
Donate Car Tax Deduction – Who should you contact about your car?
If you do not have a specific charitable cause in mind for your car donation, you can ask any charity pick-up service or agency that collects on behalf of various charities exactly what will happen to your vehicle and what they endevour to do to achieve the best price at sale. There are contact details of many such agents on the web, and they usually say on their websiteÂ which US States they cover for charity car collection.
Many charities and agents state they will do their best to get close to Blue Book private sale price, which will effect how much you can claim on your tax returns.
To read more on donate car tax deduction, the Internal Revenue Service provides guidelines on their website, along with the latest information on regulations. See the IRS website
IRS Publication 4303 – A Donors Guide To Car Donations
IRS Publication 561 – Determining The Value of Donated Property
Donate Car Tax Deduction – Tax Bracket
If you are unsure about the donate car tax deduction benefits you could achieve, contact your tax preparer or CPA for advice.
As a guide; if you know your tax bracket and know you are in a taxable position when you complete your returns for the year end, you can apply the following calculations to get an idea of your possible deduction.
Multiply the value of your vehicle by your tax bracket -Â so, if your donated car was sold by the charity and they inform you of the gross proceeds raised; you multiply that by your tax bracket.
For example: $2,000.00 multiplied by 0.28 equals a $560.00 deduction
As you can see, a donate car tax deduction is worth the effort, and a Minnesota charity will welcome the boost to their fund raising. Everyone wins!
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