There are only a few days left to get a tax deduction on your 2011 taxes. There are many ways to get a tax deduction including charitable contributions. One of the most overlooked charitable contributions is car donation.
Many charities accept car donations, although the type of car they welcome may vary. Many only accept cars that are fairly new and are in good condition. Others will accept any car for donation as long as it has not had a lot of its parts removed and is in a location from where it can be towed.
In general, the process of donating a car to charity is very easy. It usually only requires a phone call or the completion of a form online.
However, there are some things regarding the process you will want to know. First, make sure you sign your title as the seller and complete the buyers section. The charity will ask you to put in their name as the buyer or the name of the company that processes car donations for them. Remember, your title is the legal document is your proof of ownership. If you do not complete the buyers section, someone other than the charity could put their name in and in effect legally steal your car.
Also, never allow the towing service to pick up your car and your title without you or someone you trust being present. If you do, you may not receive your tax receipt and will have no proof of your car donation. The safest way to handle the title is to simply mail it to the charity or their processing company via certified, priority, registered or overnight mail. When you do, you will be able to track the title and have proof of delivery. That proof of delivery will act as proof of your car donation too!
To obtain your 2011 tax deduction, you will need to mail your title by December 31st. In order to claim your tax deduction, you will simply need to itemize on your federal return. In addition to getting a valuable tax deduction, you will help to support a charity.
When you donate your car, you will get a tax deduction that depends on what the charity does with your vehicle. You can claim the fair market value of your car only if the charity uses your car for two years, if they make major repairs to the car before selling it, if they gift it someone or if they sell it to someone in need for a greatly reduced price. Most charities do not do any of these things. Most charities sell all cars that are donated to them in the condition in which they are donated. The reasons for this are numerous. They include the high cost of car repair, the liability involved in gifting a car, the need for quick cash, etc. When the charity sells the donated vehicle as-is, the donor is allowed to claim the greater of $500 or the sale price of the car.
Author Resource:-
Karen Campese is the Co-Founder and CEO of Cars4Charities, a not for profit car donation center. They have over 1,000 respected charities that you can donate car to. When you donate your car, you get a tax deduction and help a good cause
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