1. Car Donation Tax Deduction: Cars for Charity: Tips to
Maximize the Benefits
Car Donation Charity Professionals
People nowadays have the option to donate their old vehicles to the underprivileged in the
community while reap the rewards provided by the government. To ensure that they get the
whole value, we should donate the vehicle directly to bona fide non-profit organizations. This
is more beneficial to them because they will be able to receive the full profit. As such, if you
want to be sure, you should visit the charity and ask if they can receive your vehicle right
away. The charity will have a choice to sell the vehicle and use the profit to fund their works
or they can also use the vehicle in their day to day operations too should they choose to keep
the asset.
But some individuals would choose an independent agency to help them with the donation.
For these people this path is more convenient because it contains fewer inconveniences. The
intermediary agency or donation service will process the paperwork as well as pick up the
vehicle. They will also help donors with the filing of the tax returns so the individuals can be
qualified for the said reward. Although the donation process is quite easy, there are donors
who are just busy and an independent agency can help fulfill their desire to help the
underprivileged in the community.
But, the problem with intermediary agency is that it will definitely take a portion of the
proceeds as fee. Some agencies would just hand over 20-40 percent of the proceeds to the
charity. This percentage is quite small compared to the amount charities will get if you
donated your vehicle directly to them. This is because the law has no ruling when it comes to
the transaction between the agency and the charity.
http://www.cars2charities.org
As such, we must be careful when we pick an intermediary company because some of them
are not reliable when it comes to giving back to charity. When we choose the right donation
service company, we ensure that charities are well funded. Thus it is important for the
agency to have the same mindset as ours. When the company has the same vision as ours,
we can be sure that this is the right firm to handle our donation.
One of the reasons why people donate their vehicles or boats to charitable institutions is that
as tax payers, they are allowed by the law to claim tax deductions in exchange for their deed.
If you donate your truck to a charity that provide meals to needy families, the government
recognizes this deed and because of this, you are allowed to claim tax deductions in your tax
return. However, to become eligible you need to follow conditions laid by the IRS. This article
talks about ways on how to participate in this scheme and how to maximize your reward as
well.
Tip 1: The IRS has set guidelines which you as the donor have to follow to become eligible

2. for tax considerations set by the law. One of the guidelines involve the charity using the car
instead of selling it. In this scenario, you are allowed by the law to deduct the full FMV of the
vehicle in your tax return. For example, if your car has a current FMV of $4,500, you can
deduct this whole amount if the recipient chooses to use your car. But if there are repairs to
be made, the cost of the repair should be deducted first to arrive at the allowable deduction.
All you have to do is get an acknowledgement from the charity about their intent to use the
vehicle.
Tip 2: When donating a vehicle, ensure that the charity is recognized by the government to
receive assets from donors. You cannot make a claim if the recipient is not recognized by the
government. Check the publications posted by the IRS in their website about groups who are
acknowledged to receive donations. You can also ask an expert in car donations about the
list.
Tip 3: When filing tax returns, it is very important that you follow the guidelines as well. It
must be itemized to be able to claim for deductions For vehicles amounting to $500 and up,
you need to complete the Section A of the IRS form 8283. Acknowledgement from the charity
expressing their intent to sell or use the vehicle must be attached for your donation and claim
for tax deduction to count.
When donating a vehicle to charity, it is important that you are honest about the transaction
to avoid penalty from the authorities.