In this discover 8 simple tips you can use to donate your car to charity and get the maximum tax deduction, regardless you want to donate it to kidney Foundation Car Donation, Salvation Army Car Donation, NPR Salvation Army Car Donation, or else.
Vehicle donation create a sort of satisfaction in the heart of the donator and profit to the car donation charity. But not all car donations end in a win-win situation. Some charities only see little of the proceeds from car sales and some donors do not get proper tax deductions.
It is very important to proceed with caution before you donate your vehicle when a charity you don’t know. To ensure your vehicle donation goes smoothly, discover 8 simple tips to donate your car to charity.
Search for Non-profit Status
Make sure good research is done before parting away with your car.
Some charities have for-profit fundraisers spending more than 50% of the donations received. As a result, very little of the money is indeed used to respond to the needs of the institutions they claim to support.
Organizations that do not have 501(c) (3) non-profit status with the IRS are not charities. You will also get no tax deductions after you donate your vehicle to these charities.
Pick Reputable Charities to Donate To
If you want your car donation to be purposeful, pick charities that have good reputation. Searching for reputable car donation charities is easy. You can do that by checking out organizations such as CharityWatch who evaluate charities and rate them for efficiency in supporting their causes.
In addition, you can google their name and search for reliable reviews. This should help with your decision.
Car Donation Tax Deduction
To be able to get a tax deduction for your car donation, you will have to itemize deductions from your return. There are detailed rules guiding tax deduction claim.
Taxpayers can claim the full value of a donated car under the following conditions:
- When the charity used the car for its operations without selling it
- When the charity donates or sells the car to a needy person for below market value.
Asides these listed conditions, you can only get deductions from whatever amount the charities receive as proceeds from selling the vehicle.
It is important to get a receipt from the charity or organization you donated your car to. You should also get a document certifying how much the car was sold for. These documents are meant to be provided within 30 days of selling the car by the charities.
- Fill Your Return with The IRS FORM 8283
Complete section A of the IRS form 8283 for car sold above $500 in order to be able to deduct it from tax returns. Section B of IRS form 8283 should be completed for cars that worth more than $5,000.
For more information, you can google FORM 8283. In addition, you can do some reading in The Kelley Blue Book, Hearst Black Book or National Auto-dealers Association for market values.
- Avoid Towing If Possible
Some charities offer fast and free pick up; other don’t. In this case, dropping the vehicle at the charity, if possible, can help you save some money. You can drive the car to the charity you are donating to if it’s still functional and roadworthy. It saves you the cost of towing the car.
Some organizations offer free pick up services for car donations. In fact, most charities will report the sales price of your car to you on Form 1098-C.
- Take Pictures and Videos
Take pictures and videos of the vehicle and keep receipts of work and repairs done on the car. This is very important if you’re claiming a tax deduction for it. You can deduct a percentage of your actual costs for gas, repairs, vehicle depreciation, insurance, and other vehicle-related costs.
- READ UP IRS PUBLICATIONS
Read up A Donor’s guide to car donations, IRS publication 4303, prepared by the Internal Revenue Service (IRS) and state charity officials to provide general guidelines for individuals who donate their vehicles. Among others, It instructs the donee on how, where, and when to report to the IRS the information contained in the contemporaneous written acknowledgment that the donee provides to the donor.
Follow these simple tips and your vehicle donation should go smoothly including your tax deduction. If you know other tips to donate a car to charity, kindly comment and share them with our readers.
Leave a Reply
You must be logged in to post a comment.