Car Donation Tax

Car donations tax benefits are the main reason most people donate their cars instead of selling them or trading them in for another automobile. Currently the car donation tax benefit is available only to those that itemize on their federal income taxes. Determining the exact car donations tax benefit depends on the organization chosen and what they do with the car. Some organizations auction the auto to the highest bidder, while others give them away to people who otherwise could not afford a vehicle to get to and from their place of employment. Most of these sites are non-profit, 501(c)(3) organizations. According to IRS law, an individual can only use the deduction benefit if their gift is to a section 501(c)(3) non-profit organization. These organizations are legally allowed to receive and distribute vehicles for the purpose of raising funds. Car donations tax benefits are only available if a gift of a vehicle is made to a charity that has complete control and discretion over the disposition or use of the vehicle. Charities that outsource their fundraising departments are therefore ineligible to grant a car donation tax benefit. Be sure to find out exactly how much control the charity has over the distribution of cars received before donating.
In order to actually receive benefits, a donor must receive written acknowledgement of the contribution from the charity. The car donation tax information can be on paper, in email, or facsimile form. The donor then must be itemizing for that year and file Form 8283, noncash charitable contributions, to report information about all noncash contributions if donations exceed $500 during any given year. If the car donation tax benefit is below $500 and there are no other noncash donations to any other charities, then no form must be filed. Beyond a tax exemption benefit, giving to a charity is a Biblical mandate. "I have shewed you all things, how that so labouring ye ought to support the weak, and to remember the words of the Lord Jesus, how he said 'It is more blessed to give than to receive." (Acts 20:35)
The United States government has passed a new law as of January 1st, 2005 that states; if donors donate vehicles to a non-profit organization that auctions the autos, the car donations tax benefit can only be the amount the car was actually auctioned for with a $500 minimum taxable deductions to the donor. Otherwise, if a charity gives the vehicle to a family in need, a full market value benefit can be received by the donor. If donors have any other questions or would like assistance in filing taxes, they should not hesitate to contact the IRS. The IRS can be accessed via the web or by telephone. If donors are looking for information from individual states, they will have to contact the State Treasury Department to get the specifics on laws regarding the law on specific deductions in their home state.