With tax season coming to an end many people are filing their taxes at the last minute searching for those valuable tax breaks.The typical ones include donating to charities, donating your clothes to Goodwill, and putting money in IRA’s or 401 K Plans. The latest tax break has come around donating your car to charity and gaining a tax break. So you have to wonder who is actually donating their cars to gain a tax break rather than selling it out right to get the cash.
At first people were donating their old beaten down cars and the charities would then be able to invest a small amount and provide them to needy families in need of transportation. Then as the word spread about the tax breaks, people were going to their local used car dealers and finding a car they could purchase for under $1000 and then donate and take a substantial tax break.This got the attention of the IRS and they have since put in some restrictions on who and how you donate a car. The purpose is to benefit needy families that would not otherwise be able to afford a car, not as a tax loophole for people to reduce their taxes.
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