Vehicles for Change Maximizes Your Tax Deduction: Donate a Car
January 29, 2015
Vehicles for Change offers a unique opportunity for taxpayers to receive higher tax deductions. Instead of auctioning off donated cars as many other charities do, VFC allows the donor to claim the true value of the vehicle for tax deduction purposes. By donating to Vehicles for Change, a person can receive the car tax deduction they deserve.In the early days of car donations, a donor would claim the fair market value of their donated car and receive that amount back in tax deductions. However, as some people would claim false amounts on their tax forms in an attempt to get better tax breaks, this policy was changed and new laws were set in place. Now, the amount that donors receive in deductions is a function of both the car’s value and how the recipient charity used that car. If a charity sells the car at auction, the donor will receive whatever amount the car was sold for.This is unfortunate for donors, as many car donation charities simply sell the cars to the highest bidder at auction, and sometimes for far less than the car’s fair market value. This is because these charities are looking to make money quickly and efficiently, seeking to provide a number of services for the impoverished in their area. Other car donation companies, like Vehicles for Change, use the cars to more directly benefit the people in the area.
At Vehicles for Change, donated cars are repaired by the charity and sold to people in need at a greatly reduced price. The goal is to provide low income families with a means to escape poverty without having to pay the full price for a car. There are a number of benefits to having a car for low income families, most importantly being that the families have mobility and access to greater job opportunities.
This allows the family to live a less impoverished lifestyle, and the acquisition of a car also allows for the children to participate in after school activities they otherwise would have missed, being forced to ride the bus to and from school.
If a person donates their car to a charity like Vehicles for Change and their donated vehicle is awarded to a family, he or she willbe able to deduct the fair market value of their vehicle. Despite the fact that the car will be sold by the charity for less than its market value, the IRS recognizes that it is being used to benefit low income families and rewards the donor for the full value of his or her car.
To learn more about car donations and how tax deductions are calculated, research car donations and IRS policy. Contact Vehicles for Change to learn more or to donate a car today.