Is this the first time that you plan to donate car for tax benefits? Surely, you have too many questions on your mind trying to understand how it works and how you will be able to receive maximum benefit. But its not you alone, almost all people giving away to car donation charities can be seen in the same muddle. Charity you donate car to and the amount you claim for deduction are the two main determinants of the actual tax benefit you will receive.
Your claim for deduction is much easier to handle as compared to deductions depending on the way the charity will use your car especially when its fair market value is higher than $500 and it plans to sell it. This will limit your access to the proceeds of the sale and its subsequent tax benefits. You will of course not want this to happen to you. Education about tax rules for car donation can help you best tackle car donation. Few thinks to consider can include:
• Verify organizations eligibility by checking with publication 78
• Do not forget to itemize your deductions
• Refer used-car buying guides to know your car’s fair market value
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