The biggest winner in the car donation process is usually the donor. Even better, the process of making a car donation in California is easy, regardless of your vehicle's current condition: crashed, broken, or simply not running. If you take your time, ignore all the so-called quick and easy television advertisements, and find a reputable charity that will make the fully utilize your donation, then you will be able to maximize the amount that gets to charity and minimize your risk of an IRS audit. Giving Center offers the best value for your charitable vehicle donations as well as free pickup of your California car donation. There is never any cost to you and you can receive a tax deduction for your generous charitable donation.
Car donations made in California, or anywhere in the US, that are donated through Giving Center or other certified nonprofits that are classified with the IRS as a 501(c)3 charitable organization are tax-deductible. Donors are able to get a minimum tax deduction of $500, however, if your vehicle is sold at auction for more than $500, you should receive an updated receipt with the amount it was sold for which will replace the donation receipt previously received at the time of your donation pickup.
If an IRS tax deduction is an important aspect of donation for you when gifting a vehicle to a charity, you should take a close look at the charity you choose, check the current value of your vehicle, and look into what your responsibilities are as a donor.
Look For A Charity that Directly Accepts Car Donations
Avoid the for-profit intermediary organizations that often advertise so pervasively to handle your charitable car donations. When you find a charity, such as Giving Center, that will handle the donation transaction themselves, you will guarantee that 100% of the profits remain with the charity. There is a possibility that the charities you currently support have a car-donation program that you are unaware of. Check with your current nonprofit charity first. If not, do some leg work, and find a reputable organization that has a charitable mission you would like to support, and does that charitable work well.
Make Sure Your Intended Charitable Organization is a certifies 501(c)(3)
Lots of organizations out there can claim non-profit status. However, donations to 501(c) (4) organizations, for example, are generally not tax-deductible. These types are political organizations with permission to lobby our government. Make sure the charity you have chosen has a 501 (c)(3) public charity status.
Keep Donation Documentation
Non-cash donations tend to be the most common trigger for IRS audits, so it is important to keep documentation of your charitable car donation. If your car is valued over $250 you will need to get a written acknowledgment from the charity. What the acknowledgment must contain generally depends upon what the charity does with your donated vehicle. keep in mind all acknowledgments must have the following information:
- your name and taxpayer identification number,
- the vehicle identification number,
- the date of the contribution
- a statement that no goods or services were provided by the charity in return for the donation. If that was the case, a description for a good faith estimate of the value of goods or services that the charity has provided in return for your donation or a statement that goods or services provided by the charity consisted entirely of intangible religious benefits if applicable.
Also, if your vehicle is worth more than $500, you must complete section A of the IRS Form 8283 and attach it to your yearly taxes. If your car is worth over $5,000, then you have to have an independent appraisal and fill out Section B of IRS Form 8283. Some charities like Giving Center can provide these tax documents for you when you donate. If you don't want to hassle with all the paperwork, look for a reputable charity that will help donors in this aspect.
A special rule is applied if the written acknowledgment states the donated vehicle was sold for $500 or less. In this scenario, you can claim a tax deduction for the lesser of the vehicle’s fair market value on the date of the donation, or $500 if you get a written acknowledgment.
For more on vehicle donation, or for other ways you can donate, visit GivingCenter.org today.
