Instead of letting your old car accumulate dust in the garage, why not donate it to a charity? Not only you can help them address transportation and funding issues, but you’ll also get a tax deduction!
If you’re interested in becoming a donor, consider these tips from donatecarusa.com before you donate your car.
• First, make sure that the charity is eligible to receive tax deductible contributions by asking them to show official documents confirming their tax exempt status.
• Find out if the charity accepts car donations directly or through third parties. You can drive the vehicle to the charity instead of using a towing or pickup service to let the charity to keep the full proceeds earned from selling the car.
• To verify the value of the car, take pictures of it and save receipts for new accessories or upgrades added to the car. It’s the donor who is obliged to value the vehicle.
• Upon donating your car, never forget to get a receipt from the charity. This serves as the official proof of your donation.
• To get maximum tax deduction on donated car and ensure that the car will be used entirely for the charity’s operations, you can give it to a charity that will keep the vehicle or give it to a person in need. If the charity decides to keep the car for their own use, they must provide you with a receipt within 30 days of the contribution. The charity may also be required to give you a certification stating that they will not sell or transfer the car, and explain how they intend to use and improve the car.
If the charity you are donating to plans to sell your car, ask what percentage of the proceeds they receive. Your tax deduction will not be based on the fair market value, but will be depend on the amount of money the charity received from selling your car.