Donate Junk Car: Automobile Donations: Helping the Underprivileged in the Community Vehicle Donation Info The act of giving away used or old vehicles to the underprivileged is a common practice in the United States. First and foremost, you need to pick a non-profit organization that will receive your used or old vehicle. You need to pick from the list of recognized groups in the U.S. in order to qualify for the tax break later on. You can look it up in IRS? Cumulative List of Organizations. Pick one from the list you want to be the recipient of your car. If you have already chosen a group, you can deliver the car straight to the charity so the group can get the whole proceeds. But if the process is too complex, you can also ask a donation service firm to process everything in your behalf. Choose an Intermediary Agency Carefully If you choose to go this route, you need to pick donation service carefully since there are firms which give only a small portion of the proceeds to your chosen charity. The key here is to help the underprivileged in the community and you can do this if you give a large portion of the proceeds to them. Read Full Article Value Your Car Properly To benefit from car donation, you need to value your vehicle. If the right value is used, you can get a huge deduction later on. To avoid undervaluing your vehicle approach an appraisal service firm. You should also make sure that you do not overvalue because the IRS does not want this. If you get the right value, you can deduct the right amount later assuming that the vehicle will be sold or used by the recipient. Complete Your Paperwork Lastly, you need to complete the form so you can start availing tax breaks. You must be honest when you file for tax return. In addition, you need to itemize and follow the guide laid down by the IRS to qualify. Ask for an acknowledgement from the recipient especially when the value of the car is more than $500. This is so the IRS will know if the deduction is from the proceeds of the auction or if it is a result of the recipient's decision to use the car. The practice of donating cars to charitable institutions is widely practiced in America and is very much favored by the government and its citizens. It is because car donations help many organizations raise revenues which they give back to various recipients in the society. What it does to the individual who donated his or her car to charity is he or she is given tax breaks. The government recognizes the act of goodwill and so it offers tax consideration to citizens who engage in car donations. How to Participate in this Activity You can participate in this practice if you have a car you no longer use; you can send it to
your chosen charity instead of selling it back to the market. You still get to benefit from car donation because of the tax breaks provided by the government. You can use the value of your car as the basis for tax deduction. However, you need to be careful when picking a charitable organization because not all charities are recognized by the government. If you are new to this practice, there are also agencies which act as the middle man that will handle all the paperwork in your behalf. These firms will process everything, from auctioning the car to donating portion of the proceeds to your chosen charity. The agency will help you get the right amount. This amount will be used as the basis for your tax deduction as mandated by the law. But you must be careful with these firms because some are acting as middle man but they don't really give a huge portion back to charity. Remember that apart from claiming tax deductions, the idea here is to help non-profit organizations in their endeavor. Benefits of Donating Cars to Charity As discussed above, the benefit of donating cars is tax considerations. The government will allow you to place the fair market value of the car as a deductible. The amount to be deducted would depend on what the charity does with your vehicle. For example, if the car is valued at $4,000 but the charity was able to sell it for $3,500, you are only allowed to deduct the latter in your IRS form.