subject: Car Donation Tax Deductions - Important Tips [print this page] Car Donation Tax Deductions - Important Tips
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 validates worthy charities is unique. It is also important to know that each state has its share of car donation scams operating. Some may appear legit but are actually crooked. Therefore you should do some detective work first. Luckily, there's a website that makes this a breeze, but more on that later.
Even well-meaning charities, however, may not be operating legitimately. They may have neglected to pay an annual fee to the state's Attorney General's office, or filed a form with them. Sometimes the Secretary of State's office handles charities. In any case, you should exercise 'due diligence' before selecting a charity to take your donation.
Because if you select the wrong charity, you will not receive a car donation tax deduction. But the worst part is the folks who need your donation (or proceeds from your donation) will not get it. Go to the Secretary of State website for any state, and you will probably find something about bogus charities operating in that state.
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. So how can you easily research a potential charity? Enter the charity's name into a search box on a state office's website (Attorney General or Secretary of State website). Some have searchable databases of charities that have registered with them.
Important note: Most states are quick to point out that just because a charity registers with them does NOT mean the state endorses that charity. The fact is a charity can be "offically" registered but yet donates only a pitifully small percentage of your donation to the needy. So the question is how can you find out if a charity is giving a good percentage of donations to those in need (in addition to being legit)?
You check with at least one of the online organizations that maintain a database of the "good" charities. Their databases have lists of charities that meet certain standards. It is on these types of sites that you can find out if the charity you are considering is 'in good standing' or not.
Getting a tax deduction for a car donation is probably one of the reasons you have for making a charitable donation. The bigger benefit, of course, is the satisfaction you will get from being a good deed doer. So go ahead and get both benefits by researching a potential charity the right way!
One good place to research eligible charities is on the IRS's website. Charites eligible to receive tax-deductible charitable contributions is listed on IRS Publication 78. You can download documents from their site that explain all you need to know about getting a tax deduction for your car donation. These include IRS Publication 4303, "A Donor's Guide to Vehicle Donation."
