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Donating your used car to charity

If you have a vehicle that you don’t want to bother selling, or if you simply have a big heart and want to help your fellow Americans, you have the choice of donating your vehicle to charity.
Donate

This is an option that offers a tax write off and an easy way to give back to your community, but where do you get started?

We’ve outlined the procedure here, including all of the links you’ll need to get your car donated today.

A nice tax cut return

First and foremost, in order to benefit from the used car donation tax and reduce your taxes you must itemize your deductions. If you simply make a standardized deduction, don’t donate your car expecting to be rewarded by the government.

When appropriating an amount of worth for a donated vehicle, it is important to be realistic. Don’t necessarily trust the guy at the donation center to help you determine how much it will help come tax time.

What you need to know before you start

The IRS themselves express concern over the validity of some of the car donation programs. Be sure to know where you are donating and do some research to ensure that the service you are using is legit.

Follow these steps to donation success

  • Do a background check - Be sure that the donation center you use is a legitimate one, if you donate to a illegitimate organization, the government will not recognize the deduction. The IRS offers a handy list of services qualified to accept a tax deductible donation called Publication 78.
  • Ask questions - Don’t be shy, you are donating a big ticket item, be sure to ask how the organization is going to use your donation. If you are donating, you want to know that your gesture is going to help someone less fortunate.
  • Itemize - We said it before, and it bears repeating, you must itemize your deductions on your taxes in order to benefit from the donation of a vehicle.
  • Fair market value - When planning for your deduction, it is important to know that you will not get Kelley Blue Book value as your deduction, no matter what the guy at the donation center says.
  • Let the IRS help - The IRS offers a guide for determining the value of your donation.
  • Paperwork -It wouldn’t be the IRS without miles of paperwork, be sure you possess all of the necessary information from your donation by checking with Publication 526. A publication solely dedicated to helping ensure taxpayers cover their bases.
  • Cover yourself - Be sure to have your paperwork together for the transfer of ownership when you donate. Many of the services will offer to handle the DMV paperwork for you. That’s great as long as you are absolved of liability, and ultimately that is your responsibility. Know what you need to sign to release yourself of any further liability.

    Good thing the DMV offers a handy guide for donation.

  • Bottom line, donating your vehicle can be profitable for you and help those less fortunate, it just has to be done correctly. Remember that in any business that involves free donations of big ticket items are a target for fraudulent activity.

    Be sure to only donate to those organizations the IRS or the DMV endorse.

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