Car Donations – Knowing The Facts

If you are one of the kind hearted citizens that are looking to donate your vehicle to charity, many good things await you. But as much as you might be okay with donating your vehicle and thinking nothing more about it, it still would be nice to find out about the benefits you will have as a result of your generosity.

In particular, donating your vehicle entitles you a credit to your tax statement for the next year. Here is quick and easy guide to making sure you go through the right procedure to have this donation credited.

1. Itemize Your Taxes

A vehicle donation on your part entitles you to tax deductions. To prepare your statement for such, you will have to itemize all your deductions. Use a Schedule A from the tax form 1040 of the IRS. If you are unfamiliar with the use of such forms, consult your tax advisor for details.

2. Qualify your Donations with the IRS

Your donation to a charity institution can be classified under the 501(c) (3) organizations by the IRS. To learn further of the details of such, try logging on to http://www.irs.gov, the official website of the IRS. You may also contact them by phone at (877) 829-5500. Make sure you know the stipulations of the law and follow them to the letter to get qualification for your donation.

3. Assess the Value of Your Vehicle

You will have to ascertain the amount of the vehicle you are donating. This will take into consideration the fair market value of your vehicle – noting price, age, and condition of your car.

Unfortunately, you cannot use the Blue Book value for your car alone. This is a result of a recent change to tax law.

The steps you have to go through also depend on the amount you donate. If the total amount of the vehicle you donate amounts to lesser than $250, the only paperwork required of this transaction would be a log of the name and address of the recipient of the donation, plus the date the car was donated plus a description of the vehicle.

For donations valued greater than $250 but lesser than $500, a letter of receipt will required of you coming from the recipient of the donation, along with the information mentioned earlier. For donations above this amount but below $5000, you will also need to file Form 8283, Section A alongside your taxes. And lastly, for the major donations – if your heart goes this high – those over $5000 will need all the previously mentioned data along with a formal appraisal from a professional appraiser, plus added filing for Form 8233, Section B.

Taking Care of Registration and Titles

When transferring ownership of your vehicle to the charity you are donating it to, you will want to transfer the title and registration to them as well. Be sure to make copies of the paperwork involved in the transfer of the title.

Also, you will have to make sure your registration personal information reflect this change of ownership. This will free you from liabilities that could fall on your lap even though the car does not belong to you anymore.

Finally, make sure that everyone understands their new responsibility regarding the vehicle in question. Turn over all pertinent papers to the charitable institution to formalize the transfer.