More Tips For Charity Car Donations

It’s usually pretty simple and straightforward to donate a car to charity, but there are still a few things you can do to make sure that everything goes smoothly. These tips are often overlooked because they seem like small things, but if you want to get the most out of your vehicle, it’s important to pay attention to every detail.

Make sure of the final destination

A car donation can lead to a fairly significant tax deduction, but only if it goes to the right place. The charitable organization must have 501(c)(3) public charity status in order for your donation to count as a tax deduction. Donations to a 501(c)(4) organizations are usually not tax deductible.

Fully transfer the car

Never just leave the assignment of ownership blank. When you donate the car make sure that it is filled in. If the car ends up getting sold to another user who doesn’t re-license it, you can find yourself in a lot of trouble. Any tickets that they receive or crimes they commit with the vehicle will still be attached to your name. Car donations are meant to help everyone involved, not cause a lot of new legal difficulties.

Finish all the paperwork

In order to get the full car donation tax deduction, you will need to make sure all the paperwork is completed. This means that if the car is worth more than $500 you must also complete and attach the IRS Form 8283.

Value your car correctly

The regulations on donating a car for a tax donation have gotten pretty strict. Since 2005 you can no longer deduct the market value of a car that is worth more than $500. If this is the case for your donation, you will be able to determine your final deduction after the car is sold and you find out exactly how much it went for.

When to use Fair Market Value (FMV)

There are some times when you can still deduct the fair market value for your car donation. FMV is usable when the charity keeps and uses the car, or when they make improvements to the vehicle before selling it. It is also available when the car is sold at a discount to someone with a low income, or just when it is worth less than $500.

We always want to make the donation process as simple as possible, but if you keep these tips in mind it will be even easier to donate your car and help out the best charitable organizations.

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