When you’re looking at taking a step like this, it’s always best to have to some car donation tips to go by. We’ve come up with the most important ones here so be sure and print these out to help you when tracking items down.
Find the TitleIf you want to donate your car to charity, you’ll need the title for it. If for some reason you can’t find it, it’s damaged beyond recognition, or if you just don’t want to look for it, you’ll need to contact your local DMV (Department of Motor Vehicles) to start the process of getting a duplicate title. Many of them will have the steps online to save yourself a wasted trip there to stand in line for hours. Some places will take your car donation without a title but only if it’s to be sold for parts or salvage.
Figure out your vehicle’s value:You should always have an idea of how much your donation will be worth so as to not be taken advantage of. There are several place where you can check the value online but the best that we’ve seen and what most people go by is Kelly Blue Book (KBB). Be honest with yourself when grading the condition of your car so that you’re not setting yourself up for any grief it you and your charity don’t match on values. It’s sometimes to plan on a little lower expectations because most of the time cars are sold for less than the blue book value.
The donation is a tax deduction to let’s go over the categories:
1. If you car donation is of low value, you will always be able to claim a fair market value of up to $500.00 and no additional paperwork is required.
2. If your donation is worth more than $500.00, your deduction will be the amount that it sales for.
If you donate a car that is worth more then $500.00, your deduction will be limited to the actual sale price of your car donation.This means that you won’t really know the amount of your tax deduction until the car actually sales and sometimes it might be in your favor. Most charities will work hard to make sure that top dollar is gotten because it helps them out as well. So if you thought your car was worth $2,000.00 but it actually sales for $2,300.00 then that’s an extra $300.00 for your pocket.
If your car is in good running condition and considered a reliable mode of transportation, most of the time it would be used for the charity instead of them selling it for the cash. If this happens, then you can generally claim the car’s fair market value on your taxes.
Locate your choice of CharityWhen you start the process of looking at local charities, be sure and ask them if they will provide a pickup service for your car or truck. This way you won’t have to worry about getting it there unless it’s in good running condition. Most charities will offer this as a free service.
Is the organization registered with the IRS as a nonprofit?Before you hand over those keys you’ll want to make sure they are qualified as a 501(c)3 charity. This means they are a non profit and you can ask for proof of this. If you don’t verify they are registered with the IRS, you might be just giving your car away and not able to get a deduction. You can verify the organizations status by checking the IRS website by searching Publication 78. This is a list of approved organizations.
When determining your charity tax deduction, you need to remember that you can’t go with the standard deductions and that your tax return deductions must be itemized. If you’re not concerned with getting a tax deduction by donating your car then this isn’t a worry but if you do be sure and itemize your deductions. Sometimes it might be best to get professional help if you’re dealing with a large deduction amount.
The last thing to do is to gather up the IRS forms needed to claim your car donation tax deduction. If all of your charitable donations and non-cash items equal a value or more than $500 during the tax year, you’ll need to fill out the fax form 8283 and can be downloaded direction from the IRS. IRS form 8283
By following these car donation tips, you’ll be able to make this a much smoother process for both you and the charity that you want to help out.
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