Donating your car to a non-profit is one of the cost-efficient and impactful ways of giving back to society. It favors both the donors and the recipients of the charitable act. As a donor, you can create a difference with acts of charity but still benefit through a tax deduction, which is estimated based on the value of the car. The recipient can benefit by using the vehicle for various charitable missions. Still, they can resell it and use the amount for non-profit programs. Below are some procedures you are required to follow while you donate your car to a non-profit charity.
Pick a Non-Profit
While you may encounter several non-profits advertising donating a car to charity, it is crucial that you ensure you are dealing with a registered organization. Find an organization whose profits go to charity. Take your time while searching for the proper non-profit to go with. Identify the activities they support, the people they target, and the type of work they deliver. If you find one that checks all your boxes, it might be the best place to donate your car to charity. Also, only deal with charity organizations that are 501 (c). This is very important when it comes to claiming tax deductions.
Make Necessary Preparations and Make the Donation
Having identified the perfect non-profit to donate a car to charity, you can think of starting the transfer process. Obtain a title for your vehicle, if you don't have one, from a local department of motor vehicles. Ensure that you formally hand over the car to the non-profit you have picked. During this process, have the assignment of ownership space filled as you sign over the car to the charity organization.
Complete your Paperwork to help claim Tax Deductions
Vehicle donations to nonprofit charity should be accompanied by an initial receipt. It can be granted immediately after the donation is made or later, depending on the arrangements made with the nonprofit. The receipt acts as proof that you donated your car to charity. It also helps you claim a tax deduction depending on the value of your car. If your car sells for less than $500, you use Fair Market Value (FMV). Other occasions that may attract the need for an FMV include:
Your car may also sell for more than $ 500, which creates the need for additional paperwork for higher tax deductions.
Bottom line
Keenly follow all the procedures to facilitate a smooth and efficient process. Giving car donations to not-for-profit charity is for a worthy cause that brings you joy and fulfillment. For more information, contact a local charity, like Give 2 Kids.
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