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You might think that the only things that you can possibly get out of donating junk cars is clearing some space in your yard, and giving the local pest population one less nesting spot. While these are both true and completely valid reasons for donating junk cars, they are by no means the only reasons there are. For one thing, you can actually get a deduction off of your taxes, just for donating that old automobile of yours.

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Many children do not get proper education and healthy food due financial constraints and lack of required support from charities that they are depending upon. Car donation concept can be the main source for generating funds for such needy children. Unfortunately, the number of car donations is decreasing more and more every year. People today have more beneficial options for their old cars.

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The most important thing about tax write offs is to make sure the proper paperwork is done. Once you donate the car you need a receipt. Without this receipt you won't qualify for tax deduction. When you donate a car, the car is inspected to estimate its sale value. There is an exception to dramatically increase the amount of tax write off. It's how the charity uses your donated car. If it happens that your car is used for "significant" tax-approved work for the charity, then you can claim the full market value of the car proceeds. Scams on car donation have been known to exist. Take the time to check out the palce you are planning on making such a substantial donation.

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Now, the question that arises here is that why would anyone want to donate their car instead of selling it. Obviously, it will bring cash, and a donated car will bring nothing. If you are able to ignore the financial aspects, there are a lot of reasons why you should donate your car. Selling an automobile is obviously a pain, and if you can afford to let the financial aspect go, is it not better to donate your old automobile? A donated car can do well for someone at least.

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When donating your vehicle, you need to consider these points

  • You can get a tax reduction for donating your vehicle
  • You have to ensure the charity you are making a donation to is a qualified 501(c)(3) organization or else you cannot claim your tax reduction
  • Laws regarding transfer of automobile titles are different for each state

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Many times you tend to take help of the intermediary firms to donate cars probably because you have shortage of time, and then make a mathematical calculation. At least ask the organization about how much they pay to the charity from the selling of the donated car. If the answer is about flat $100 on used and old car regardless of the price of the car or about $2,000 per month, then your donation is not eligible for the tax rebate and deduction.

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