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Donate Car to Charity

How the scam works:

(with video below)

Donate a car to charity but avoid crooks. They're back at it.

This year, one of the biggest scams around is the Donate Car to Charity or Car Donation Tax Deduction scam. Let's take a look.

Your old car is still running fine, but you consider getting a new one. The old vehicle is not really worth much anymore and you decide to donate it to a charity, especially since you are offered a charitable tax receipt in exchange. All you need is to find out where to donate a car and charities that accept car donations. However, the most important thing is to know how to do it.

Watch the video below to see some tips and to find out how to donate your car for tax credit:

Car Donations For Charity Tips Video

How does the scam work? By law, a percentage of the sale of the cars donated should go towards charitable programs. Unfortunately, many recipients of the cars give away very low percentages, sometimes only 1% - keeping the rest!

The scam is also prevalent when it comes to the ads that offer to help you make a car donation to charity for tax credit. Oftentimes, these are middle-men who give only a fraction of the car donation worth to the charity. In the United States, these middle-men are not required by the IRS to contribute a certain amount of the auto's proceeds to a charity. The amount the charity receives from a car donation is negotiated by the charity and them. However, this scam could occur in Canada, Australia, or the United Kingdom as well.

 

How to avoid:

How to donate your car for tax credit? You should consider a few things before donating your car. Check with your local Better Business Bureau to make sure the charity is reputable. Always avoid the middleman. Research well where to donate a car in your city. Also, inquire what percentage of the vehicle's sales go directly to the charity and sign the vehicle's title directly to the charitable organization. Don't be shy to ask how the funds from the donated vehicle will be used.

Look for a charitable organization in your area. If you are a US citizen, make sure that the charity you choose for your car donation is a 501(c)(3) organization. These are the only nonprofit groups that can provide a tax deduction. Last but not least, try to deliver the car yourself - don't let anyone to come and pick it up.

There are several good charities to donate to. You just need to find the best car donations program in your town. Whether you think about SPCA car donation, the Kidney Foundation, the Humane Society, veteran groups, any children organization, or even if you consider to donate car to church, do an extreme homework. Same thing happens if you consider donating your motorcycle or boat. Many people look first for how much tax deduction for car donation they would get, ignoring to do diligence on the recipient. There are many legitimate charities that accept car donations, just do your homework well.

How to report a scammer:

You an report a Car Donation Tax Deduction scammer in your area using the link below:

Report a Car Donation Tax Deduction Scammer HERE

 

What about the car donation tax deduction?

The deduction for donating a car is based on the fair market value of that vehicle. You can get the fair market value in a number of different ways. The most common way is going on the Internet and look at specialty web sites that allow you to put invehicle's details: year, condition, etc. The donation is based on a list that IRS has featuring organizations that are qualified as donors. However, churches, temples, mosques, governments, or government agencies don't have to be on that list as a qualified organization to donate to. However, most of the time people are donating the vehicle to groups like the ones above.

In order to get the benefit from donating a vehicle you have to itemize your taxes on your tax return. Itemize rather than doing the standard deduction, otherwise it's not even worth making a donation. You'd be better off selling it if it's a low class vehicle. You need to be honest about the fair market value of that vehicle because the IRS will look for supporting documentation on how you came up with the fair market value. Make sure you'd be in as close as to perfect on that amount. Don't always go with the highest fair market value. What a lot of people do when putting in the information of a vehicle is lying that the car is in a better condition than it actually is. You need to find a value somewhere in the middle. Since you're donating your vehicle it's probably in a poor condition so make sure that you put that into the description, regardless of the vehicle donation program.

 

You have to document that donation and with the documenting you need to make sure you're getting a receipt from the place you're donating to. On that receipt you need to have a date, the amount, the address of the place, and a phone number of the contact person. If the IRS audits you it is going to need all of that, otherwise they do have the right to exclude the donation. IRS Publication 4302 provides details from all the rules and regulations with donating a car.

You can also use an online calculator for any car donation. This will allow you to put in your donation and see how it's gonna affect your taxes and refund. If you're donating a car that has a value of more than $5,000, you're going to have to fill out form 8283. Here you're gonna put the name of the organization that you donate the vehicle to, with a description. It's going to have all the dates: date of acquisition, how you acquired it, how you came up with the fair market value, etc. When you do your taxes online is automatically going to attach this form to your regular 1040 that you submit to the IRS. It's gonna ask you a series of questions about the donation. The publication that the IRS provides has a lot of small details about donating. If you're donating quite a bit this is something you're gonna wanna understand just to make sure you're following all the rules and guidelines.

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