The biggest winner in the car donation process is usually the donor and not the charity recipient. But if you take your time, ignore the quick and easy television appeals, and find a reputable, high-performing charity like Giving Center, that will make the most of your donation, then you can maximize the amount that actually gets to charity and minimizes your risk of an IRS audit.
- Check Out How Giving Center is the Best Charity Organization to Donate With!
If at all possible, avoid the for-profit intermediary organizations that advertise so pervasively to handle your car donations. Giving Center handles the transaction themselves, so you can ensure that 100% of the profits remain at the charity. Check with them first. If not, do a little research, and see how Giving Center does the work you like, is in the region you want to target, and does that work well.
- Make Sure Your Intended Organization is a 501 © (3)…Giving Center Is!
While many organizations can claim non-profit status, donations to 501 © (4) organizations are generally not tax-deductible. These are political organizations with permission to lobby our government; like Disabled American Veterans or the National Rifle Association. Make sure your intended recipient has 501 © (3) public charity status, which Giving Center is!
- Use Fair Market Value (FMV) for the Car
There are several exceptions which allow you to use the Kelley Blue Book or a NADA guide, but you must use the FMV, not simply the highest value listed for the year and make of your car. Use the FMV when:
- instead of selling the vehicle, the charity keeps and uses it,
- the charity makes improvements to the car before selling it,
- your car is sold at a discounted price or donated to a person with a low income,
- or if the car is worth less than $500.
Otherwise, you can only deduct the amount that the charity sells the car for at auction as indicated on the written receipt the charity sends you.
- Complete Your Paperwork
Non-cash donations are the most common triggers of IRS audits, so it is important to keep thorough documentation of a car donation. Specifically, if your car is valued over $250, then you need to obtain and retain a written acknowledgment from the charity. Additionally, if your car is worth more than $500, you must complete section A of the IRS Form 8283 and attach it to your yearly taxes, Giving Center will send you a Form 8283. Furthermore, if your car is worth over $5,000, then you must have an independent appraisal and fill out Section B of IRS Form 8283.
If you would like more information on how you can donate a vehicle check us out here. Don’t have a car to donate? Donate a boat, donate aircraft, donate a house, donate collectibles, donate computers, donate real estate, and more!