Enjoy a tax deduction when you follow these simple steps explaining all you need to know about how to donate a car.

Do you have a car that is gathering dust in your garage and you would like to get rid of it and make use of the space instead? You can always donate your car to charity.

With this you can actually kill two birds with one stone:

1. one you get to do a good deed and
    
2. secondly you can claim a tax deduction as well.

How to donate a car to charity?

So the next logical question would be – how to donate a car to charity?

First and foremost you have to find a worthy charity. If the charity that you are familiar with does not accept a car donation, you can look for an IRS- approved charity on the IRS website: www.irs.gov/eo.

Once you have identified the charity of your choice to donate your vehicle to, it would be better if you can deliver the car yourself.  

Also ensure that you formally re-title your donated vehicle to the charity and advise your state’s department of motor vehicles of the transfer as well. You don’t want to end up having to be responsible for parking
tickets and other traffic violation summons.

Files needed for tax deduction after donating your car

When your donation is worth less than $500, you will not need evidence of the sales price. This applies as well if the charity uses the car that you have donated and not dispose of it.

However, if your donation is more than $500 you would need to submit IRS Form 8283 with your tax return.

If it is more than $5000 you would require an outside appraisal. You have to ensure you keep a complete paper trail of this car donation including receipt from the charity and copy of the title change.

Read all about how to get a tax deduction after you donate a car.