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How To Donate Your Car for Tax Deduction

Updated on June 13, 2013
Your unused, junk car could help some people in need.
Your unused, junk car could help some people in need.

Got An Unused Car To Get Rid Of?

Do you have an unused car lying around in your garage or backyard, probably hasn't been running for years. Have you ever thought about donating it to charity? In case you don't already know, you can donate your car for some tax deduction. On top of that, your unused car will help some people in need out there. What's a better way to get rid of your unused, junk car than to donate it to charity and to help other people for a good cause?

Find The Right Charity To Donate To

Even though the vehicle donation tax write-off you can receive is no different in all places, each state uses different ways to validate and qualify charities. But you should be aware that vehicle donation scams exist in each state. Some of them might seem genuine but are really shady. You should therefore carry out some investigation first. Fortunately, a website has been created to speed this process up.

However some charities with good intentions may also be operating outside of the law. It may be that they are yet to make a particular payment to the office of the Attorney General for the state they are operating in, or they failed to submit a particular form. You should seek information from the office in charge of charity affairs for your state. Whatever the case may be, you need to exercise caution before you choose a charity to receive your donation.

In the end if you make use of the wrong charity, you will not receive a tax deduction. Also, the needy individuals who are supposed to benefit from your generosity will get nothing. Reports about local charities that were discovered collecting contributions and keeping the funds for themselves are all over the place. If you are yet to see one, go to the website of the Attorney General of any state.

Get tax benefits of donating your junk car.
Get tax benefits of donating your junk car.

Useful Read: Income Tax & Deduction

Avoid Getting Scammed!

Sadly, this trend seems to be on the increase. If a fake charity is caught and closed down, another one is set up almost immediately. So is there a way for you to differentiate the fake charities from the genuine ones? Several states have set up sites that people can use to determine the authenticity of a charity. Some of the states maintain searchable records of recognized charitable organizations.

You should however note that just because a charity is registered with a particular state does not mean that the charity in question is endorsed by the state. Most states stress this information in their official websites. The truth is that a registered charity may actually be carrying out illegal activities. For example the charity may present only a tiny fraction of donated items to needy individuals. Thus how can you determine if a charitable organization is operating legally and is giving a reasonable fraction of donated items to needy persons?

There are some online organizations that keep a record of genuine charities. You can check with any of these as they keep registers of charitable bodies that meet certain standards. These kinds of websites will help you determine if the charitable organization you have in mind is doing well or not.

Obtaining an automobile donation tax write-off is likely one of the gains you considered for giving your old car to a charitable body. Of course you will also get the satisfaction of knowing that you are lending a helping hand to people in need. So ensure that you get these two benefits. Check that charity out before giving them a donation. You will find eligible charities on the website of the IRS.

Donating your junk car will not only help you get tax write-off, it will also help other people for a good cause.
Donating your junk car will not only help you get tax write-off, it will also help other people for a good cause.

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