Car for Charity - Doing Good Things for Charity
Are you thinking of donating your car for charity? That is a noble thought and one that many people go through with each year. Charities make money from the sale of these vehicles. However, it is important to make sure everything is proper to insure the car goes where you want it. Many reputable charities are out there. However, there are as many scammers out there as well. Make sure the state knows about the charity where you want to donate your car. Check with agencies such as the Better Business Bureau to verify they are who they say they are. Ask the charity for documentation on their tax-exempt status from the IRS. If all of this checks out, the charity is likely a good one.
How do you reap the rewards of donating your car for charity? The charity will sell the car and take the proceeds to further their work. In exchange, you get a receipt that you can use to get a tax deduction when you file your annual return. Do not give up the car unless you get a receipt in return. Without it, you have no tax deduction claim. If the charity sells the car, they should give you a receipt with the final sales price on it. If the charity keeps the car for their own use, they should give you a receipt that indicates this. You will need all of this before filing your taxes.
What do you do before you donate your car for charity? There is only one word to describe what you need to do, document. Take pictures of the car first. Then make copies of all your documentation prior to turning the vehicle over. Keep a copy of the receipt with this documentation. The IRS tends to audit tax returns that involve non-cash donations. If the IRS wants to see your proof, you have full documentation to present at the audit to prove what you donated. Make sure you do not try to take a deduction higher than the value of the vehicle. If the IRS audits you and finds that you claimed too much, they will hit you with penalties as well as a tax bill.
Donating your car for charity is a good way to get a tax write-off. It is also a good way to keep a car out of the landfill. You get a sense of satisfaction as well. All told, it is a good combination of things to do with one action.
