Tax Questions To Ask Before You Donate
December 9, 2014 - Posted By Vets Vehicles
The holiday seasons is our busiest time as many donors rush to donate their cars in time for the year-end tax season. Before you donate to Vets Vehicles or any other charitable organization, make sure you know all the necessary information about receiving a tax deduction for your generous donation. Here are the top questions to ask before you donate:
Question #1 : How much of the proceeds from the sale of my car will go to veterans charities?
Answer : This is an important question that you should ask all charitable organizations when you make donations. There are countless car donation programs out there that claim to give high returns to their benefitting charities, when in reality the charities receive as little as 10%-30% of the gross proceeds from the vehicle. Here at Vets Vehicles we give at least 60% of the gross proceeds from the car donations we receive to our veterans charities. All the charities we give your donation to are vetted for their high-quality programs, financial transparency and overall commitment to helping veterans. Visit our Why Donate page for more information about the veterans charities your donation will support.
Question #2 : Is Vets Vehicles eligible to receive tax deductible contributions?
Answer : Yes! Vets Vehicles is a 501(c)(3) organization, as such, when you donate your car to Vets Vehicles you are donating directly to a charity and eligible for a tax deduction.
This is another critical question to ask before making any kind of cash donation or contribution to a charitable organization. The most common types of organizations qualified to receive tax deductible contributions are section 501(c)(3) organizations, such as charitable, educational or religious organizations. Visit IRS.gov to search for registered charities such as these to know if your donation is eligible for a tax deduction.
Question #3 : How much will my tax deduction be?
Answer : The IRS will only allow a deduction for the fair market value of the car. If the vehicle is sold for $500 or less the donor can claim up to $500 of the fair market value and if the vehicle sold for more than $500 the donor can claim a deduction of the selling price of the vehicle.
Question #4 : How do I actually go about getting my tax deduction?
Answer : Always get a receipt from the charity you donate to! You need this paperwork to qualify for your tax deduction. After you make a donation to Vets Vehicles, we will mail you your tax receipt after the donation is complete. If you don’t receive this in the mail, just call us at 888-838-7834 and we will re-send it.
If your car is worth more than $500, you must complete Section A of IRS Form 8283 and attach it to their tax return. If the car is worth $5,000 or more, an independent appraisal is necessary. You must also fill out Section B of IRS Form 8283. Take pictures of the car and save receipts for new tires or other upgrades to verify its value.
Question #5 : Anything else?
Answer : Yes! Always consult your tax adviser or the IRS for more information about how you can claim charitable deductions. The IRS can answer your tax questions and can provide tax forms, publications, and other reading materials for further assistance. IRS materials are accessible through the Internet at IRS.gov, through telephone ordering at (800) 829-3676, and at IRS walk-in offices in many areas across the country. If you have more questions, call us at 888-838-7834, we would love to help!