January 11, 2008, Newsletter Issue #25: Junk Your Car And Make A Tax Claim
Tip of the Week
Did you know that you can claim tax deductions for car donations valued at more than $500? Once you've decided to make the important decision to have your junk car removed and donated to charity, there are a few things you can do to claim a tax deduction. The first thing you're going to need to do is obtain a written acknowledgement signed by the charity. This information should be attached to Form 1098-C, Contributions of Motor Vehicles, Boats and Airplanes. In addition, you'll need to include the gross proceeds of the sale, the vehicle identification number and a statement certifying that the vehicle was sold between unrelated parties.
The IRS offers a valuable website where more information can be obtained about car donations. You can get help with a variety of issues, have questions answered via email and much more. It might sound like a lot of legwork to get your claim submitted, but with some pre-planning and a little organization, it should be hassle-free. If you’re unsure of something, always check with your accountant. They’re the best experts available and can save you a lot of headaches down the road.
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