How to Donate Your Car to Charity and Get Tax Deduction

Donating your used car to charity is a win-win situation; the charity gets your gift and you get tax deduction. Below are some simple steps to make a car donation.

1. Understand the rules. A good place to read the government rule on car donation is IRS Publication 4303, A Donor's Guide to Car Donations (available on the IRS's website at www.irs.gov). This guide outlines some important rules regarding car donation. For example, one important rule states that car donation must be made to qualified organizations in order to be tax deductible.

2. Determine the value of your used car. Although the blue book might help you determine the value of your car, you should read IRS Publication 561, Determining the Value of Donated Property (available on the IRS's website), to see what your car really worth.

3. Find a charity to donate your vehicle. If you are associated with any charity or non-profit organizations, that organization might be your choice for donating your car. Otherwise, check the Yellow Book or search on the Internet to find an organization to which you feel like donating your car. After you have identified a candidate, you should review IRS Publication 78, which is a list of organizations eligible to receive tax-deductible charitable contributions. This document is also available on the IRS's website and it's searchable. Make sure the candidate charity is eligible. Otherwise, you might not get your tax deduction!

4. Make your donation. After you have made the donation, make sure to ask for a written acknowledgement from the charity. You will need to attach this acknowledgement to your tax return in order to get your tax deduction.

John Lee is a freelance Internet writer. He has written articles for websites such as Car Donation Helper, (http://www.car4donation.com)

In The News:

Too many taxes  The Indian Express
3 Ways to Decrease Capital Gains Tax  Daily Journal Online

Keeping Your Own Money ? NOT Handing It Over To The Taxman

Most people trying to make a crust online (or offline... Read More

The Tax Man Cometh... To Search

You're at your office, or home, and the doorbell rings... Read More

Save Money on Taxes - Let Uncle Sam Pay for Your Fun!

"Deducting Meals and Entertainment"O.K. You've been working really hard on... Read More

Failure To Pay Employment Taxes ? Penalties

As an employer, you must pay employment taxes if you... Read More

Tax Audits: What Signs Make You More Likely to be Audited by the IRS?

It's a major fear for most Americans: A notice from... Read More

IRS Offer-in-Compromise, Hype or Hope?

"Settle for Pennies on the Dollar! IRS debts settled for... Read More

Small Businesses: Company Car Vs. Personal Mileage Reimbursement In Hurricane Katrinas Wake

With gas prices at an all time high before Hurricane... Read More

Tax Reduction Tips

In the rush to get tax returns prepared and filed... Read More

IRS Obtains More Than 100 Injunctions Against Tax Scheme Promoters

The IRS has obtained civil injunctions against more than 100... Read More

Tax Tips - Which Tax Form Is Right For Me?

IRS Tax forms can be confusing.Am I a 1099 or... Read More

Tax Secrets - How Drew Miles Helped Me

How about a Tax Tip?As we all know Taxes are... Read More

Render Unto Caesar

Once a year Canadian taxpayers are required, by law, to... Read More

Requirements To Produce Tax Information (Whats Up With That?)

"What we've got here is a failure to communicate." ... Read More

IRS Statute of Limitations: Do Taxes Ever Expire?

Many Americans believe that an IRS debt is a debt... Read More

Small Businesses Filing Amended Federal Tax Returns to Recover Money

Small Businesses Filing Amended Federal Tax Returns to... Read More

Reducing Taxes Through Dividend-Salary Mix Calculations

Should I take wages or dividends from my privately owned... Read More

Tax Investigation - What You Need To Do

The knock on the door from a Tax Inspector is... Read More

Deducting Points On Home Refinances

Deduction of Refinance PointsAny points that you pay in the... Read More

IRS Certifies 2006 Toyota Hybrid for Clean Fuel Deduction

The Internal Revenue Service has certified the 2006 Toyota Highlander... Read More

Income Tax Returns Your Accountant Should Not File

You've been feeling uneasy (perhaps even guilty) because you've failed... Read More

Tax Reform, My Way

We need real tax reform and we need it now.... Read More

How To Get An Instant Pay Raise

As a gentleman was leaving my class recently, he wanted... Read More

Early Distributions From Retirement Plans

An early distribution from an Individual Retirement Arrangement (IRA) or... Read More

Corporations Failing To Claim AMT Exemption Overpay Taxes By $11,000

Does your incorporated business pay alternative minimum tax ["AMT]? If... Read More

Tax Strategy - Let Washington Pay for Your Corvette, Porsche, or Air Plane

Deducting Your Auto ExpensesAuto deductions are a very complex topic.... Read More