by: Brandon Hopkins
At one time or another it will happen to just about everyone. You will get your
W-2's from your
employer, and sure enough you made some money! That is a good thing right? Yes
and no.
It is a good thing as long as you had the adequate amount of taxes deducted
during the year,
but what if you didn't? What if you owe the government money on April 15th?
This can be a scary situation for most people, and can end up costing you
dearly. What do you
do if you owe the government more money than you have? Find a deduction! If you
have an old
car sitting around or one that isn't running, they will work perfectly. Maybe
you even have a car
you've thought about trading in, that will work as well.
Here are 3 easy steps to an income tax deduction by donating a car (or other
vehicle).
1. Do your homework.
There are many sites on the internet that offer free information about donating
a vehicle. Is your
vehicle worth more than $500? Can you deduct the full amount? Can you donate a
motorhome? It
is best to get this information from a third party so that they will not have a
stake in what they are
telling you. A great site for information on donating a car can be found at Car
Donations Online.
Car Donations Online is a third party organization with no financial ties to any
charity or nonprofit
company.
2. Find your charity or nonprofit organization.
Do you know someone with cancer? Have you had a kidney related death in your
family? Do you
attend a church? Do you support pro-life movements? I would recommend finding a
charity that you
can be proud to donate a car to. If you don't associate yourself with any
charities that accept
donations anywhere in the world, get out more often! There are literally
thousands of charities and
not for profit companies that accept donations, you will be able to find one
that fits what you like.
3. Make your donation, and make sure it's deductible
For the majority of people, your full donation will be deductible. For some
people, that may vary by
state and by income. If you need advice, consult a tax professional.
Make sure you get a receipt for your donation, you may need it if you ever are
audited. You may also
need your receipt if you have your taxes professionally prepared. Next time you
get in hot water with
the IRS, just donate a car!