Do you wish to donate a car? Then, a charity car donation has proven to be one superb way of getting a deduction on your taxes. The basic tax procedure for most Americans is as follows: a person makes a certain amount of income per year called the "gross income". The Internal Revenue Service (IRS) allows certain deductions from the total "gross income". The remaining income is called taxable income. This taxable income is then taxed, a certain percentage on the basis of the income range. The higher the taxable income, the more the tax to be paid.
Tax payers can deduct certain things to reduce their taxable income. The main deductions are standard deduction and itemized deduction. In the standard deduction the deductions are predetermined for you by the IRS. Your total deduction will have to be more than the standard deduction for you to qualify for a tax deduction.
There are some helpful guidelines to assist you when you are making a car donation to get a tax deduction.
1. Asking the organization for an Internal Revenue Service's letter of determination will verify the eligibility of the charity chosen as a recipient.
2. A letter of determination from the Internal Revenue Service is important to make certain of the eligibility of the charity you choose as a recipient for the car.
3. Make sure that you are given an authentic receipt by the charity that receives the car.
4. Ensure that you know the exact value of the car and have documents stating its value to avoid any suspicions regarding your income tax returns as there will be a lot of scrutiny from the IRS when it comes to non-cash donations.
5. Save your receipts for any upgrades including any new tires to document and verify the car or its value.
6. Clear photographs of the best angles of your car will also go a long way in giving it the attention and value it deserves. Sift through a used car buying guide that helps you determine how to get the most out of your donation. They also offer quite informative success stories and tips on car donation.
Alternatively, you could sell the car privately for a figure close to its total market value by either using an online website or car dealers. This is usually hard to pull of so good luck with that.
Tax payers can deduct certain things to reduce their taxable income. The main deductions are standard deduction and itemized deduction. In the standard deduction the deductions are predetermined for you by the IRS. Your total deduction will have to be more than the standard deduction for you to qualify for a tax deduction.
There are some helpful guidelines to assist you when you are making a car donation to get a tax deduction.
1. Asking the organization for an Internal Revenue Service's letter of determination will verify the eligibility of the charity chosen as a recipient.
2. A letter of determination from the Internal Revenue Service is important to make certain of the eligibility of the charity you choose as a recipient for the car.
3. Make sure that you are given an authentic receipt by the charity that receives the car.
4. Ensure that you know the exact value of the car and have documents stating its value to avoid any suspicions regarding your income tax returns as there will be a lot of scrutiny from the IRS when it comes to non-cash donations.
5. Save your receipts for any upgrades including any new tires to document and verify the car or its value.
6. Clear photographs of the best angles of your car will also go a long way in giving it the attention and value it deserves. Sift through a used car buying guide that helps you determine how to get the most out of your donation. They also offer quite informative success stories and tips on car donation.
Alternatively, you could sell the car privately for a figure close to its total market value by either using an online website or car dealers. This is usually hard to pull of so good luck with that.
About the Author:
Mark Peter, the owner of a free website resource located at: http://www.Irs-Deductions.org, presents a very useful tax deduction guide. The IRS deductions site helps to educate all taxpayers to properly deduct their eligible taxes.
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