Donating your car is a great way to help a charity in many ways. You can cut out the sales and receive a deduction on your on taxes, if it is done correctly. First you have to find out which charities that accept car donations by following this research process.
Understand that donating a car to charity has changed drastically for the Internal Revenue Service as (IRS), charities in the last 15 years. Consider the following steps in order to Donate Your Car To Charity:
You have not estimated the value of the car on your taxes. If you are searchinf a tax deduction for your generosity, then donation worth more than $500 must include a sales receipt from the 501c(3) charity of your own choice.
Vehicles worth is less than $500 can quote the Kelley Blue Book price, and they don't require you to include a sales receipt from the charity of your choice. You are not required to complete out an IRS Form 8283 on your taxes either, so check the Kelley Blue Book price immediately.
Take a look on the hidden fees. Car donations require delivery fees, if you don't drop it off yourself. You have to pay for title change fees.
Understand the risks. Donating or Donate your car to charity will require you to change the title over to the charity in which your are. You are liable for parking tickets and other associated with the car. Any charity that is asking you to keep the title is unlikely to be a good donation.
Do call the Local Charities in these given steps.
:Call the charities in your community to which you have donated a car before. They may accept vehicle donations, but choosing a local and simple charity will cut down on fees and direct your aid to your own favorite organization.
Ensure your organization is a 501c(3) charity, according to the IRS. Ask for their tax ID number. You can only deduct a donation from this type of charity.
Ask your local agency if they accept the donation directly or use an agency. Some businesses make money by selling cars for charity. Your charity is likely to receive less than 50 percent of the profit in this case.
Talk with the community about a community auction. Many communities have yearly auctions for large items, like cars and boats.
During these auctions, 50 percent of the profits may go to the organization that puts on the auction. You are likely to receive a portion of the proceeds, which you can then gift to charity. You can get rid of drop-off fees and help two organizations through this method.
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Choosing a state charity may mean that you can drop the car off yourself and avoid drop off fees.
Ask the charity how they will use the car. Knowing their intentions should help you to evaluate how far your donation will go.
Go to Charity Navigator, at charitynavigator.org, to research the charities you have found. Charity Navigator rates these charities, so that you can get a good idea of how much of the value will be used for administration costs.
Make sure the charity will provide you with the necessary paperwork you need. Get a contact at the charity that will provide the following:
Official information for the title transfer. You will need to transfer your title immediately upon donating the car.
A charity auction receipt. If your car is worth more than $500, you will need paper proof of the money the car made at auction. If your car is worth less than $500, you will need an acceptance receipt from the charity.
Further documentation, if the charity has decided to use the car for other purposes. You can deduct fair market value (FMV) if the charity has decided to use the vehicle for their transportation needs or if they have sold the car to a person in need. Consult your tax preparer about how to calculate and prove the FMV.
Go to Charity Navigator to research charities that support causes you want to help. Although there may be delivery fees, you may want to target your donation.
Call these charities to confirm they accept auto donations and see how they will sell/use the car.
Transfer the title and arrange for delivery of the car. Keep in contact until you receive the necessary receipts required for taxes.
Keep an extensive paper trail throughout the donation process. You should have proof of the title change, proof of the receipt of the car and the car sales receipt, if applicable. These will become necessary in an audit.
Fill out an IRS Form 8283, if the car sold for/was worth more than $500. Submit this with your yearly tax return.