Any donation you make to help out a worthy cause can also help you with your taxes. If you have an old car parked in your garage and you dont know what to do with it, car donation is a wonderful way to help a charity. Although the car donation laws have changed, this is still a good way to help yourself and others too.

In 2005, the laws changed regarding tax deductions on boats, vehicles or airplanes that are valued over $500. Now, the charity must provide written documentation or acknowledgement within the 30 days of processing your donation. If the charity gives an exaggerated or false statement, they can be fined or penalized.

Under the January 2005 rules, your tax break is based on how the charity uses the donated vehicle. If the car is sold, the gross sale price can be deducted. If the charity uses the donated car following the new law for significant charity work that is tax approved, youll be able to deduct the market value of the vehicle. However, some stiff penalties will be charged for falsified documents. The law is watching carefully those charities not following the rules and regulations involved with car donation.

Even though the old laws had some problems, many charities are skeptical about the new car donation laws. A lot of organizations are concerned about what might happen when the responsibility of tax deduction is put under the authority of the charity rather than the donor. Some of them have actually sent a letter to the Treasury Secretary that suggests that people may be discouraged from donating cars if they arent aware of the deduction amount that will be allowed. This, they fear will mean that some donors will be lost. Charities feel that donors must be able to weigh the cost of benefit in order to know if it is enough for them.

If you do decide to pursue car donation, you will find out that the process is easy. You can contact most charities by phone or online. It is important to ask the charity you wish to get involved with for some specific and important information. This is necessary in order to avoid complications and also be sure you understand the process. Its not hard, but does require you to fill out some important information and get the car ready.

Daniel Richards has an interest in Finance & Business and Car Donations, for more FREE information and articles please visit Car Donations Resources

New Tax Law Benefits For Car Donation Tax Deduction
The IRS has taken steps to take the guesswork and confusion associated with car donation tax deduction with a new law. When January 1, 2005 rolled around, you were able to deduct the full price that the charity of your choice receives for the sale o...

The Requirements for A Used Car Donation
If you are considering donating a used car to a charity there are several things you need to know. Your donation benefits not only you but also recipient of your donation. Of course, who your recipient is and how they will use your used car varies f...

Small Business Tax Deductions
Small business tax deductions are implemented by the government to encourage entrepreneurship and investment. A business owner can save large amounts of money through these small business tax deductions. Special small business tax deductions are gra...

Tax Planning Strategies For A Bigger Tax Refund
The time to start your tax planning strategies is earlier in the year rather that later. In Canada, and from what I read in the newspapers and online, most taxpayers worldwide feel that they are paying too much tax.And to add insult to injury, most ...

3 Tips For Getting The Most Out Of Tax Deductions
Hundreds of tax deductions that could be filed and claimed go unaccounted for each year. Unfortunately, it is just because people do not realize that they can take them that they do not. Yet, there are many ways in which you can insure that you are...

Tax Deductions
Tax deductions signify the amount deducted from a persons gross income so as to reduce the taxable income. The basic standard deduction depends on the individuals tax return filing status. The taxpayer need not pay income tax on expenses termed tax d...

401K Tax Deductions
The 401K plan is an employer sponsored retirement savings plan in which the employee transfers a portion of his/her wage into the retirement account. This plan allows an employee to save for the retirement without attracting any immediate income tax...

Deductions For Salespeople
A discussion of tax deductions is great and all, but most people want to know about their specific situation. The tax deductions for salespeople are covered here.As a salesperson, it is likely that you spend a certain amount of your day traveling. W...

Small Business Tax Deductions - Top 5
With tax season just around the corner it is never too early to start thinking about available tax deductions. Small business tax deductions are important to ensuring that you are getting all the return that is possible. Some tax deductions for small...

Itemized Deductions Limit Changes
Right off the bat, those of you who have never itemized, try as hard as you can to keep up with the information that is about to spew your direction. Itemized deductions can be a confusing subject to begin with. If you are looking into itemizing th...