Making a donation of any kind to charity is a very nice gesture that can make anyone feel good. When you are moving, or even doing some spring-cleaning, you can find a lot of items that you may no longer need, or items that no longer have any use to you. You have a few options when it comes to these items; you can sell them or you can donate them. Although most people only donate clothes, toys, and other household items, you can also donate a vehicle. Many people do not know that they can donate their vehicle, but there are many wonderful charities that will take your used vehicle. Like most donations, you can make a donation of a vehicle tax-deductible. There are certain steps that you need to take to make in order to make your donation tax-deductible. By taking these steps, you will be able to make a wonderful gesture, as well as claim your donation on your taxes.
When you have made the decision to donate your car, you need to go to the Department of Motor Vehicles. You need to fill out a form that is called a notice of transfer/release of liability form. You will also need to complete a title transfer and transfer the registration. You need to make sure that the car is no longer in your name in order for the car to be donated correctly.
The next step you want to take is to get your car’s value. The easiest way to do this is to go online and look at Kelley Blue Book. You will need to know the make, year, and model of the car, as well as mileage. You will also want to take note of any damage to the car because that will affect the price of the car. You will look at what the value of the car would be if you were to sell it to a private party.
You will want to decide which charity to donate your vehicle to as well. In order to get a tax deduction, you will have a limit on the places that you can donate you vehicle to. You will most likely want to donate to a non-profit organization in order to get a deduction on your donation.
Depending on what the charity will do with your vehicle will determine the amount of money you get for your car. If the charity decides to keep the car for their own use, then you will most likely be able to deduct the Blue Book value. If the charity decides to see your car, you will have to find out how much the car was sold for, and you will get that deduction amount, even if it is less than the market value you found in the Blue Book.
When it comes time to claim your donation, make sure you have documentation of the donation. You can receive this from the charity that you donate to. On your tax forms, you will report the amount of the deduction on line 17 of Schedule A. You will also need to complete IRS Form 8283 if the deduction is more than $500. If the deduction is betters $501 and $5,000, you will fill out Section A. If the deception is greater than $5,000, you will need to complete Section B. If you must complete Section B, you will also need a written appraisal as documentation.
Donating your car to a charity can be beneficial for many reasons. You can feel great about giving your car to a wonderful cause, but you can also benefit when tax season comes around. In order to make sure you are able to make your donation tax-deductible, make sure to take these steps to ensure you are doing the deduction process correctly.