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.
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