After a lot of thinking you have decided to donate your auto to charity. That's a terrific thing to do
because the charity can either use your vehicle for their very own purposes or sell it and take the
proceeds from the sale to finance its operations. Donating a vehicle can be fantastic for you also as you
stand to receive a tax deduction when you itemize your federal tax return.
Donating a car isn't a slam dunk, however. Your desire to "do good" can have very little on a charity or
your tax position for those who manage these actions incorrectly. Thankfully, there's a correct solution
to donate a auto and every reputable charity knows how to properly accept a car donation, fill out all of
the proper paperwork and follow the rules set out by the IRS.
Your first step is to find an eligible charity. Not all charities can manage automobile donations and for
those that do they must be an IRS-approved 501(c)(3) enterprise. Visit IRS.Gov and search for "Exempt
Organizations Pick Check" to locate out if a charity is listed. If it's not listed, then you won't be able to
claim a tax deduction. You could nonetheless make a donation with no the tax benefit, nonetheless.
Donate directly to the charity. You will find it the easiest process by donating your automobile directly to
a charity, avoiding a middleman. When operating through a middleman, he'll take a significant chunk
from the proceeds from the sale and pass the rest on towards the charity. By working directly with
charities that accept donations, you'll be able to maximize the benefit they get from your donation.
Deliver it oneself if at all possible. That way the cost of a towing service won't diminish what the charity
receives for the car upon its sale to an additional party.
Properly complete the transfer of the title. Make certain that your vehicle's title is transferred correctly
according to state regulations. Fill out all DMV info and re-title the vehicle for the charity. Notify the
DMV of its transfer to prevent probable difficulties later on like parking tickets. Get in touch with your
auto insurer to cancel coverage once the transfer has been completed.
You need to understand the ins and outs of receiving a tax deduction from your donation. If the charity
keeps the vehicle for internal use, then discover its fair industry worth by working with trusted sources
for instance Kelley Blue Book to figure out what that amount is. If the car is sold, then you'll need to get
a receipt from the charity with all the quantity the charity made. You'll file IRS form 8283 along with
your tax return, but if your vehicle was worth more than $5,000 you'll need to get an independent
appraisal and attach that document with your tax return.
If a charity does not accept donated vehicles and you nevertheless choose to support it, try selling the
car yourself and taking the proceeds from that sale and donating it to the charity. Yes, this can be a bit
of a hassle, but you'll likely get a superior cost for the car and be able to take a bigger tax deduction.
However you proceed, donating your car to charity is an admirable gesture and you are helping those
most in need.