The process of donating a car is easy to accomplish. You can sell your car for extra cash if you want, but donating your car to charity will help those in need. Also, when donating your vehicle to a charitable organization, you can claim it as a tax deduction on your income taxes.
You should avoid any middlemen when giving your car to a charitable organization. You may have seen TV commercials or billboards with people that offer to assist you in awarding your automobile to an organization. The fact is that they will assist you, but they will also require that you pay them between 50% to 90% of the value of the auto. So be sure to work directly with the charitable organization itself.
You may already be a part of a charitable organization. If so, ask if they accept donated vehicles. Not all charities accept donated automobiles. If you do not currently support a charity, you will have to do a little bit of research to find a reputable one. Check and see if there are any in your area. You can do a search online to find this information. Once you have the name of a few, check their reputation with the Better Business Bureau.
In order to claim the donation as a tax deduction, the charitable organization you are thinking about donating to needs to be an IRS approved organization. The IRS can tell if the organization qualifies. Places that normally qualify are churches, temples or synagogues.
It is important to know if/when you will need to report the auto’s market value. If the charitable organization keeps the automobile for its own personal use or for use in their charitable events, you do not need proof of the sales price. Also, if the donation is under $500, you do not need proof. To find the market value of the auto, refer to the Kelley Blue Book.
It is important to keep track of all records involving the donation for tax purposes. If your car’s donation is over $500, you will need to have a copy of the IRS form 8283 to turn in with your tax forms. If the donation is worth over $5,000, you will need to have the car appraised and attach a copy of that appraisal with your taxes.