The Best 5 Reason You Must Donate Your Car To Charity

If we recall the policy about 15 years ago, where people got thousands of dollars in tax deductions from the car or anything they donated, making car activities for charity became popular at the time. However, a huge tax deduction from the donation was finally stopped by the Congress by endorsing the American Jobs Creation Act in 2004, in which cutting restrictions could be obtained from donations worth more than $ 500. 

So that the deduction is calculated from the nominal amount received by the charity, and then proved by a receipt from the charity organization to the donor.

With the new law related to the number of tax deductions obtained from donations, it will certainly make you who have never done a donation ask, is it still worth to make a donation in 2018 or not? 

Absolutely Yes. Although not as big as before, at least there are still many positive benefits that you give to those who receive your donation. Here I have summarized the 5 best reasons why you should donate a car to charity in 2018.

1. Your vehicle is very beneficial for the operations of a charity.

The car or vehicle that you have donated can be a mode of transportation for them to do other charitable activities such as bringing sick people to the hospital, distributing food to the homeless, and other charitable activities. So indirectly, you also take part in their charity activities. Isn't that fun?

2. Provide additional free space at home.

It sounds trivial, but you will really feel the benefits. Space you previously used to store your car can be used for other important purposes. Who knows you need a new space for family gatherings?

3. Reduce the amount of tax you pay.

Yes, it is undeniable that one of the main goals of donating goods to a charity is tax deduction. So you can save hundreds of dollars from this charity and you can use it for other useful activities. But keep in mind, not all charitable organizations are recognized by the government. You can find the best charity to donate your car, just google it. And make sure you get the handover document after making a donation.

4. No need to be busy to find car buyers.

You only need to find the right charity and let them find buyers for the car. Voila, your car has been sold successfully at a reasonable price (depending on the condition of the car). Besides getting benefits like point #3 above, you have also saved a few dollars because you don't have to rent advertising space in the newspaper.

5. No need to be busy driving a car to the location.

This is also one reason why you have to donate a car to a charitable organization rather than sell it yourself. In addition to saving advertising costs, you also do not bother to drive the car to the location. There are many charities that provide free shuttle facilities, but you must make sure that the service is completely free. Because there are also charities that charge transportation fees on the sale value of the car, even though it is written free pick-up.

Actually, there are a lot of benefits that you and others will get from the contributions you make, but I only write down the most important ones. Do you have a car or valuables that are not used, and want to donate to a charity? Just try searching on the internet with keywords like donate a car in Michigan (change to the location of your city).

4 Important Things Between Make a Donation And Tax Deduction

Just reading the title will make you interested and ask: Will giving a car or other donation automatically reduce the tax I pay? But unfortunately, the answer is NO. Even though you are a generous person and likes to donate your belongings, it does not necessarily make a tax deduction for you.

After we discuss what is a tax deduction in the previous post, this time we will talk about things that need to be considered so that the donations we give affect the tax reduction. There are so many, but only four important points will be discussed that the authors feel are most important in making donations.

There are several important points that you must pay attention to before making a donation so that you get a tax deduction. Next, I will share 5 important things related to donations so that it can affect the tax reduction.

1. Choose a credible charity institution.

Before you really want to contribute something, the most important thing is, you have to find the right place. Because not all charitable institutions are recognized by the government so that the donations that you give will not affect the amount of tax you pay. If you ignore this and make a donation, your main goal of reducing taxes will be in vain because of choosing the right place.

2. Donations to individuals have no effect on tax deductions.

You have full rights to who and where your goods will be donated. But, if your main goal is to reduce taxes, then you must pay attention to this. Donations given to individuals (for example to friends or neighbors) will not affect the amount of tax that you bear. This is also in line with our first review, so make sure that you pay attention to points 1 and 2.

3. Receipt or Note for each donation that you have provided.

If you make a donation in the form of physical items, such as donating your old car, your watch, and other valuable things, then you will get a handover receipt. But what if you want to contribute some cash? Do cash contributions also affect tax deductions? Yes, this can apply. If you have proof of legal handover of the money donated. So, make sure you get a receipt or receipt after making a cash contribution.

4. Pay attention to the reciprocal value of a charitable organization.

You, as donors will get additional services or commonly referred to as donor incentives from charitable organizations (such as banquets, etc.). But you don't worry, because every charity organization will definitely help you to calculate everything until you will get a tax deduction.

What Is A Tax Deduction ?

Before we are going to far talk about car donation, we must know what is a tax deduction. Talking about car donations is closely related to tax deductions. Why? Because by donating your car to a particular charity, it will automatically reduce the taxes you pay. So, what is that?

Definition of Tax Deduction

Tax Deduction is the amount or percentage that is charged to a taxpayer after deducting monthly personal expenses such as payment of house rent, repair of housing, education costs, etc. Some or even many people consider that tax deduction is only for those who have a lot of money and are famous. They are wrong. There are a lot of tax deductions for those in the lower middle class.

Tax Deduction vs Tax Credit, What is the difference?

Tax credit and tax deductions have something in common, that is, they can lower your income tax bill. However, the difference is the procedure used. As previously explained, tax deductions can reduce your income tax bill by reducing the amount of income that will be taxed. A tax credit, do it by reducing your income tax directly.

Tax credits and tax deductions have their advantages and disadvantages. If used correctly, they can be your best method of saving money on taxes.

Then, what is the relationship between tax deductions and donations? Okay, we will talk more about that.

How Can Donation Affect My Tax Deduction?

Charitable donations are a very useful thing, which can help each other, charitable contributions can also reduce the amount of tax that we pay. Even so, that doesn't mean you will save $ 1 dollars for every dollar you give to a charity. But at least 25 cents for every dollar. Even though giving a charity can have an effect on the amount of tax you pay, it is very important for you to follow the applicable rules regarding this matter.

We will discuss in the next post on 4  Important Things between Donation and Tax Deductions. So, always visit here to get the latest updates about donations. Thank you for your visit to this simple blog.