When deciding to donate a car for tax write off, consider these tips to make sure everything is done right and you receive the biggest possible deduction.

• There are many companies that prompt you to donate your car to charity. They advertise on TV, on the radio, on billboards. They are the middleman and keep at least half of the car value to themselves. Instead, contact the charity directly and ask for information about donating a car to them. If the charity doesn’t accept a donation in a form of a vehicle, look up other charities that do.

• If you decide to go through the middleman because it is faster and convenient. Ask for more information on how much will be donated to charity. If the intermediary don’t a flat amount, you may not be able to receive a tax write off.

*** Donate Car to Charity ***

• In order to receive a write off the organization you are donating to has to be approved by the IRS as a non-profit and have a 501(c)(3) status.

• In order for you to receive a car donation tax deduction, it is not enough to just estimate the value of your car. If the car is worth more than $500 the IRS will want a paper showing how much the charity received for the car at the auction. Contact the charity to receive this information. You can use a fair market value if the car is worth less than $500.

• If the charity keeps the vehicle for its own use, then you can use a fair market value to receive a deduction.

• If the vehicle is worth more than $500, you will need to include IRS Form 8283 with your tax return. If the vehicle is worth more than $5,000 then you will need to include a copy of an appraisal done by a third party. You will also have to attach a receipt from the charity and a copy of the title transfer.

It seems like a lot of work to donate a car for tax write off but it will be well worth it in the end. If you have all this information, you will be able to get the largest vehicle donation tax deduction and the charity will receive the most money out of it.

This entry was posted on Monday, November 22nd, 2010 at 6:49 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.