- - Tips For Donating A Car To A Favorite Charity | Automotive Article

Tips For Donating A Car To A Favorite Charity

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Tips For Donating A Car To A Favorite Charity

Donating a car to charity is a great act of kindness that you can give to people less fortunate than yourself. You can also get a nice tax deduction when you donate a car and you will gain satisfaction in knowing that you have made a difference to someone in need. To get the best return for your charity and to keep your tax deduction there are a few simple rules to follow so that everyone wins with your charity car donation.

First thing to consider before donating a car is which charitable organization would you like to benefit from probably the biggest donation that you will make in your lifetime. These days there are many car donation charities across the country that accept donated vehicles. You should take a little time and thought as to which charitable cause you really believe in and can see your donation making a real difference to those in need.

You need to make sure that the charitable cause you are considering donating to is qualified with the IRS as an approved 501(c)(3) non-profit organization. This is to ensure that you will receive your tax deduction without a hitch. The charity concerned may inform you that they are IRS approved. You should always do your own due diligence and check that what they say is correct by checking out the IRS Publication 78 list of qualified charities.

You will need to obtain an acknowledgement receipt from the charity concerned within 30 days of the sale of the vehicle, stating the gross sale proceeds received at auction. If however the charity decides to use the car in their daily business or materially improve the car, they must confirm to you this intended use within 30 days of your donation. You would then use the fair market value for donating a car tax deduction purposes. Record keeping and tax filing requirements when donating a car

If your vehicle is sold for more than $500, or is valued at greater than this amount if the charity uses it in their daily activities. You will need to fill in IRS form 8283 on your tax return. If the vehicle gross sale amounts to more than $500, but less than $5000, you would then fill in section A of the form. Any vehicle donated with a value over $5,000 or sold for greater than this amount will need Section B of the form to be filled in. You would also need an independent written appraisal of the vehicle value if the charity is to use the vehicle themselves. If the car donation is sold by the charity, then you would need the signature of an authorized charity worker and attach this to your tax return form.

You may decide to obtain the services of an intermediary for-profit organization for your donation. If you take this route you will need to be aware and research the percentage cut of the sale proceeds that the organization takes for their admin costs. Some of these middlemen are reasonable with the sale percentage that they keep from the charity concerned. These organizations will either split the percentage between themselves and the charity, or they may just give a set amount to the charity regardless of the sale price of the vehicle. Thus keeping the majority of the sale price for themselves. So you should keep this in mind if your vehicle is valued at more than a few hundred dollars, you may wish to deal with the middleman who only takes a percentage, rather than the flat fee to charity entities. Percentage taken between these organizations varies widely, so it is a good idea to shop around for a company that offers a reasonable percentage that will benefit your favorite cause.

Another important point when donating a car is to remember not to leave the ownership details blank on the car transfer paperwork. Some charities prefer you to leave the ownership details blank to save them time when it comes to selling the vehicle. This can leave you open to risk of parking and speeding fines, or worse in the future if the new owner fails to register the vehicle in their own name. You would be held responsible for any problems that the new owner caused with the vehicle.

When donating a car to your favorite charity, your vehicle can help improve the life of someone or family in need, while at the same time giving you a nice tax break. If you do just a little background research before donating your car, you will have peace of mind that your charity has got the most benefit from your generosity. Just remember to keep your paperwork handy for tax return day !

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