When giving to car donations charities Madison residents may be a bit confused as to what they can claim as tax deduction and which forms they need for that process. As with all things about taxes, there are significant complexities, rules, exceptions to those rules, and more that you have to contend with. Essentially, vehicle donations are categorized according to their value. If the value is below $500, you have to abide by some specific rules. The key element is that the charity you have worked with must send you an official tax receipt that states exactly what the value of the vehicle was at sale.
When Giving to Car Donation Charities Madison Residents Need to Consider the Value
You will be pleased to know that deducting a donation that is worth less than $500 is the easiest of all. All you need is a written confirmation from your charity, for instance the charitable organization featured at http://www.rawhide.org, that you have made the donation. This confirmation will include some details about the car, such as its make, model, and year of manufacture. The confirmation does not have to include the value of the vehicle, however. What it does have to show is the fact that:
- You did not receive any services or goods yourself in return for making your donation.
- The estimated value is for the services and goods that were provided in return for the donation, if any.
- A statement is issued to reflect that any services or goods you received in return for your donation were of a religious nature, which means they are intangible.
- The estimated value is for the services and goods that were provided in return for the donation, if any.
- A statement is issued to reflect that any services or goods you received in return for your donation were of a religious nature, which means they are intangible.
When to File Your Claim for a Tax Deduction
If you want to make a tax deduction, you can only do so after you have received the receipt and your written acknowledgement. If you have not received those in time for the deadline, you must request an extension. In some cases, for instance, if you surpass the extension, you may be able to claim the deduction the following tax year, but you must check this first.
The paperwork you receive from the charity after making your car donation is for your own records. You do not have to file it with the IRS, in other words. However, they may ask you to verify it, which is why you must keep the receipt.
