Tips on How to Donate Car to Charity California

Most people do not think of donating their cars to charities because cars are valuable and they can sell for a lot of money. But, if you have an old car that is parked in your garage for a long time, you should consider donating it to get some tax benefits out of it. The proceeds from the vehicle donation will be used to help low income families and paying the salaries of the charity worker.

                           

If you plan to a donate your car to a charity, you must not forget to ask them to give you a written statement on how much tax deductions you will get on Form 1098-C within a period of 30 days after you donate the car. You need this proof in order to show the IRS about the deduction amount you are expect to get in your tax when they ask for it. You can get ready the paperwork if the charity didn’t contact you within 30 days.

The deduction that you get will be lower than the deduction that are awarded prior to the changes in the tax laws. However, the new tax laws allow you to get the same level of deduction as the fair market value if the charity organization improve the vehicle for example installing a fender. Therefore, if you want to get the best tax deductions, you should not be rush in donating your car to a charity. Instead, you should take time to find an organization that will improve the car for a specific charity purposes prior to donating.

There is no need to obtain an estimate on the donation value to prove to the IRS. This is because the IRS will want to see the actual evidence of the value that the charity gets from your car donation. The majority of the charity organizations would sell the cars for cash. If the charity sells your car for cash, you should ask for a receipt so that you can show to the IRS. You must remember to attach the IRS Form 8283 when filing a tax return.

If the car donation’s value is over $5,000, you will have to attach an appraisal document, title change and the receipt of the car donation. You don’t have to produce a proof if the donated car’s value is lesser than $500. In the situation where the car is worth less than $500, you can use the fair market value based on the Kelley Blue Book (KBB).

Besides, you must make sure that the vehicle has already been completely retitled to the name of the charity organization prior to donation. If you did not re-title the vehicle, there is a risk that you will get fined when the staff from the charity park use your car to break the traffic rules for example park the car in a place not allowed for parking or speeding. It is important that you never reach an agreement with the charity organization on leaving the space blank.