Donating a car is a welcome and gratifying choice for those who want to dispose of their car, but find it difficult to find a buyer and would rather not junk it. The prospect of a tax deduction is an additional lure. However, you can’t just dump your car in front of any charity’s office. There is a procedure to follow to get the full benefits of a car donation. Do your homework and be vigilant, but allow yourself a good deed. You don’t want to have to hand your car over to just anyone and you want to be sure that the proceeds from the sale of your car is going to the charity of your choice. Here’s a checklist to follow to ensure your donation is going to the right place:
- Do a check on the charity. It’s easy to set up a charity foundation, so you want to see the obvious documents posted for clients to see. This includes, among other things, the charity's 501(c)(3) letter granted by the IRS, , which is the incorporation document from the Secretary of State's office in the state where the nonprofit is operating. Without this document your donation of your vehicle won’t enable you to take a charitable deduction.
- Make sure your donation will be well-spent. Take a look at the charity’s activities. If it’s a local charity, you can probably attend one of them. Moreover, be involved enough to find out how much of the sale of the car will go to charity.
- Ensure you’ve got documentation. A receipt of the car donation is essential. Additionally, the appropriate IRS forms will provide further support of your deduction. This is also important for your tax records, keeping in mind the deductions to which you are entitled.