Donate My Car

Donate my car - Guide to making a car donation. Throughout the year we are all looking for ways to reduce our tax burden. Since tax laws are different depending on which state or country you live in there can be some confusion as to just what you can and cannot deduct. In the United States the Internal Revenue Service has a variety of forms that tell you precisely what you are able to deduct.

Car donations are a charitable donation that, in many cases, are tax deductible. The process is mutually beneficial for the donor and the recipient. You donate your older car to a registered charity that accepts this type of donation. They get a boost for their cause and you get a deduction for your taxes.

The charity will do one of two things with that donation.

• If the vehicle is in running condition they can auction it off and use the proceeds for their charity.
• If the vehicle is not in running order it can be sold off as scrap.

Either way the charity benefits from the donation and so do the worth while causes they support.

The process for donating is very simple but it is up to you to determine if your donation can legally be a tax deduction.

First you have to be eligible to receive the tax deduction. This can be as simple as itemizing the deductions on Schedule A of Form 1040. However there are other limitations that you must be aware of before simply deducting the donation.

• Does the vehicle you are intending to donate qualify as a tax exempt vehicle? This is obviously important and there is a good chance that it will. Most vehicles that are legal for public roads are able to be used as a tax deductible donation. This also includes boats and planes plus some all terrain vehicles.
  
  
• The percentage you can claim. Since you are only able to claim up to 50% of your current gross yearly income you are limited if you are donating a vehicle such as a plane that can be worth thousands or tens of thousands of dollars.
  
  
• For contributions between $250 and $500 there is less information required to deduct the donation. The acknowledgement form from the charity will have to contain the following.
  • Name of the charity
  • Vehicle Description
  • Plus one of the following
    • A statement saying you never received any goods or services for your donation. Or...
    • A statement provided from the charity with a description and fair market value of goods or services they may have provided to you. Or...
    • If goods or services were provided in the form of non-tangible services (ex: :religious advice) this must be stated.
  
  
• For donation amounts that exceed $500 you will need to gather additional information before trying to deduct the donation amount. When you receive the written acknowledgement from the charity it must contain additional information.
  • Your name and Tax Identification Number
  • The vehicle identification number must be present.
  • The date of the vehicle donation must be included
  • One of the following must also be included with the date of the donation
    • A statement saying you never received any goods or services for your donation. Or...
    • A statement provided from the charity with a description and fair market value of goods or services they may have provided to you. Or...
    • If goods or services were provided in the form of non-tangible this must be stated.
      
      
• The charity itself must have tax exempt status with the Federal Government. Most education and religious organizations are tax exempt. The IRS maintains a particle list of those organizations that have tax exempt status. Go to the IRS website and search for Publication 78, Cumulative List of Organizations. This will be your best place to start for determining which charities you can donate to and receive a tax write off.

Since you are dealing with the tax man you have to do your homework to be sure that your car donation is truly able to be a tax deduction. Cars to Charity is a free guide to help you learn how to donate a car to charity.