Every year individual becomes liable to the payment of taxes and in most of the cases they don’t notice the burden of taxes and income on their head. It is important for every individual to do tax planning to make sure that least amount of tax is paid, and income is managed in the best way possible.
Do not matters if an individual is an employee or is self-employed everyone should plan for his tax and find out ways to save it. For people who possess car and it is of no use to them anymore then giving out car as donation is one of the best ways of saving on tax. This helps the person to get rid of their car and also claim deduction while filing tax.
Most of the charitable organizations are registered under the tax-deductible sections and meets the standard of IRS. People should thus make sure to donate car to organizations which are registered and can help them claim tax deduction. Individuals should thus play smart for claiming tax deductions and make donations of unused cars to charitable organizations to make the most of it.
For individuals to claim tax write off, it is important for them to do complete paperwork and then claim tax exemption. Once the car is donated, the donor should make sure that he receives a receipt of the donation and also can file it with the tax authorities. If in case individual does not possess the receipt, it would make it difficult for them to qualify for tax deduction.
Estimate the sales value
Whenever the car is donated, it is important to estimate the value of car to compute the amount of tax deduction. At times, people try to over value the car in order to obtain higher amount of tax deduction, however things of this sort can be avoided by assessing the style of functioning of charitable organization. If the institution is completely involved in donations and charity, then individual can claim full amount of deduction as that of market value of the car
Check out charitable organizations
The decision of making donation should be made after carefully scrutinizing the organization and after being sure that they are putting in their car at the right place to make most out of it.
At the time of making donation, donor should click images of the things donated to have some proves of it. Once you donate the car always ask for a receipt of it such that deduction of the same can be claimed within time. After receiving the receipt, check the amount in receipt with the amount of car donated in charity. This decreases confusion to the minimal amount. While submitting tax returns attach the receipt and photograph of your car such that complete tax deduction on car donation can be achieved.
The above mentioned factors should thus be followed to claim tax deduction from donation of cars to charitable organizations.