Tips For Making Car Donations Simple
There are many good reasons for donating a car to charity. Beyond the great tax benefit that is offered, you can know that someone is receiving an opportunity to better themselves and help their family. Many car donations go to needy families that are on hard times. Others go to single Moms who need ways to get to and from work and daycare. These mothers will save time and money by having their own vehicle and your donation will enable them to spend more time with their families.
Donating a Car
While donating a car can be a simple process that will benefit someone and allow you to have a tax break, there are some important factors that should be considered before a donation is made. Below we will examine some of the common mistakes that are made and offer advice as to how to perform a smooth and trouble free transaction.
Find Yourself a Charity
Many charities are already set up to take donations and to offer the donors a tax write off. These charities are recognized by the IRS and can offer the donor a transaction that is simple and easy. Many churches, synagogues and mosques have attained this status and offer programs that try to match cars with needy families. These organizations are a good bet, but if you have another type of charity in mind, you should check with them first, to ensure that they are able to take this type of donation. There are ways to research the status of different charities by visiting the website of the Better Business Bureau. This site will have details on the track record of different charities and offer a glimpse into the experience that others have reported when donating to them. They will point out if a charity has a good reputation or a poor one and you can use this information to help guide you in your search for a worthy recipient. Charity Navigator is another site that can effectively help you with your giving.
Cut Out The Middle-Man
There are many organizations that will offer to pick up your car donation for free and then deliver it to the charity of their choice. While this option may seem appealing, it is often not the best route. This is because these middle-men will keep a large portion of the value of the vehicle for themselves and then offer the charity at the end of the line a small amount of the total value. Many of these operations will keep anywhere from 50 to 90% of the total value of the vehicle before the car donation charity sees any money. After all, if these operations can afford to take out ads on billboards and television, then they are obviously turning a profit. By working directly with a charity that is equipped to accept car donations, you will avoid this and can be certain that the value of your car will go where you have intended.
Check the Tax Status of Your Recipient
In order for you to receive a tax deduction for your vehicle donation, the charity that you select must be a 501(c)(3) organization that is IRS approved. Only these organizations will be able to provide you with the proper tax receipt that will allow you to receive a deduction come tax time. Most religious organizations and institutions will qualify but it is always a good idea to check in advance. If you visit the website of the Internal Revenue Service and search for Publication 78, you will find a list of many other organizations that are non-profit and equipped to give tax receipts. By checking directly with the IRS, you will have no question as to the status of your charity or its ability to offer you a deduction.
Information and Delivery
You will need the title of the vehicle in order to donate it to a worthy charity. It also helps to check with the Department of Motor Vehicles to ensure that there are no outstanding parking tickets or other charges associated with the vehicle. This will add to the value of your donation. If the car is in good working order, you can help the charity by delivering it yourself. This will save them the expense of having to pick it up or have it towed and maximize the benefit that you are offering them. Once the vehicle has arrived at the charity you can transfer the title over to them and notify the DMV in your area that you have taken this action. Do not leave a blank space on the donation papers. If the charity asks you to do so, you may want to consider finding another non-profit to donate your vehicle.
Leave a Clear Paper Trail
In order to receive a tax deduction and avoid an audit, it will help to have a clear record of the transaction. If you vehicle is valued at less than $500 or the charity keeps it for themselves you will not need to produce evidence of value. If the vehicle is valued at more than $500, you will need to fill out an IRS form 8283. Any vehicle that is valued at more than $5000 will require an outside appraisal. Also, be certain to keep track of the receipt and title transfer of any car donations.
No related posts.