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Car Donation Tax Deduction - Advice And Benefits

16th February 2011
By DonateCar101 in Taxes
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Your car donation tax deduction is going to be the same no matter which state you live in. But the way in which your state verifies worthy charities is unique. But it's also important to realize that each state has fraudulent car donation charities (or professional solicitation services for the charities) in operation under the radar. They seem kosher on the surface, but a closer look will reveal the scam. So you should check out a charity before donating your car or truck. Lucky for you, there is a web site you can quickly access tools to help you do this.

Even well-meaning charities, however, may not be operating legitimately. Often this is because they haven't paid a fee to the Attorney General's office for that state, or forgot to file some form. In some states the Secretary of State is the office that regulates charities. Regardless, you need to use due diligence before donating your used car or truck to ANY charity.

Because the wrong charity (or professional solicitor for the charity) will result in no car donation tax deduction for you. Worse, the people who really need your donated car or truck will not get anything. Just go to any state's Attorney General website - or its Secretary of State website - and you will find news of a local charity that got caught taking donations and keeping the money.

Unfortunately, there is a non-stop flow of fraud charities forming all the time. For every one that gets caught and shut down, two more appear. How can you check out a charity before donating your car or truck to them? Many states have websites where you can type the name of a charity into a search box. Some have searchable databases of charities that have registered with them.

You need to realize, however, that just because a charity is registered does not mean that the state endorses the charity. In fact, it could turn out that a registered charity gives only a tiny percentage of their proceeds from donations to the needy. So what further checks can be done to make sure a charity is a good one, in addition to being legal?

The answer is you check with online charity watchdog services. These types of services maintain lists of charitable organizations that meet certain criteria. There you can find out if the charity you are researching is in 'good standing' or not.

Applying for a car donation tax deduction is likely one reason you have for donating your car or truck to a charity. But the bigger benefit is that good feeling you will get from having done something truly worthwhile for a family less fortunate than yourself. So make sure you are able to get both: Check out a charity the right way!

The IRS (Internal Revenue Service website has good information on car donation tax deductions. A searchable list of charities able to take tax-deductible contributions is the IRS Pub 78. There are also downloadable .pdf documents on their website that explain all you need to know about car donation tax deductions. The main one you would want to download is called, "A Donor's Guide to Vehicle Donation" (which is IRS Publication 4303).

The first step in getting your car donation tax deduction is to check out the charity you are considering. Just click on your state for step-by-step instructions at
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