Charities to Donate Your Car to
Do you need cash from the car for another purchase or expense? While donating a car comes with tax benefits, you won’t see those benefits until the following tax season, said Mark Scoot, spokesman for AutoTrader.com.
Donate your car if it is a clunker or your goal is simply to get it out of the driveway. Most charities that accept car donations will pick them up within days of your call, Scott said.
If you’re donating your car, make sure you keep a good record of its condition and any evidence you can find for its market value, Soctt said. If you get audited, the Internal Revenue Serivice is going to want you to prove you didn’t inflate the value for the bigger tax break, he said. If your car or boat is worth more than $500, the IRS is going to want to see evidence of how much the charity got for it. (Most charities that accept these donations turn around and sell them for cash.) You’ll need to get a receipt from the charity revealing exactly how much money it made.
You won’t need evidence of the sales price if the charity keeps the vehicle or vessel and uses it in its charitable work, or if your donation is worth less than $500. Then you can report its fair market value based on listings from Kelley Blue Book and similar sources.
You can choose from an extensive list of some of America’s most respected local and national charities such as American Diabetes Association, American Kidney Fund, Cancer Research Institute, American Red Cross, United Way, United Breast Cancer Foundation, Humane Society, SPCA and many others. For a complete list visit http://www.donateacar.com/alphabetical.php
On the site listed above they even offer you a free travel gift and provide the paperwork for you to do take the tax deduction.
Make sure you avoid middlemen. Numerous for-profit intermediary organizations advertise aggressively offering to help you donate your vehicle to charity but they typically keep about 50 percent to 90 percent of the vehicle’s value for themselves.
In order for you to qualify for a deduction, the charity that gets your donation must be an IRS-approved 501(c)(3) organization.
Make sure you formally re-title the vehicle to the charity, and report the transfer to your state’s department of motor vehicles or licensing. Never agree to leave the ownership space on the charity donation papers blank.
Experts advise keeping a thorough paper trail. If your donation is worth more than $500, you’ll have to attach IRS Form 8283 to your tax return. If it’s worth more than $5,000, your documentation must include an outside appraisal. You’ll also need proof of the donation, such as a receipt from the charity and a copy of the title change.
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