People in need can receive cars from different charity organizations if they qualify. If you're ready to upgrade your vehicle, donating your car to a charity is a great way to give back to the community. If you're interested in looking into how to donate, here are some tips for making a donation.

Document Everything

Non-cash donations are a huge target when it comes to getting audited by the IRS. Especially donations with high value. When you donate your car to a reputable charity, they will give you a receipt for your donation. Save your receipt with your donation so if you get audited, you will have the paperwork handy to show everything is honest and correct. Take pictures of your car before you donate it and keep the pictures with your receipt. You might not need them, but it's best to have as much documentation as possible.

Complete Necessary Paperwork

Some donations are more cut and dried than others. You need to understand all of the paperwork that goes with donations. The value of your vehicle will determine what paperwork needs to be done. If your car is worth less than $500, no additional forms are needed with the donation. However, if your vehicle is worth more than $500, you need to fill out an IRS Form 8283 along with your tax return. This form is for all non-cash donations that are worth more than $500.

Section B only needs to be filled out if your vehicle is worth more than $5,000. You also need to get an independent appraisal of the vehicle to prove its value. Simply claiming that it's worth more than $5,000 isn't enough for the tax write-off.

Find a Qualifying Charity

Giving your vehicle to a friend or a needy member of the community is a nice thing to do, but you won't be able to write it off on your taxes at the end of the year. You have to do your homework and find a charity that is an approved 501(c)(3) organization. These are organizations that are approved by the IRS as tax-exempt charities. Most churches would qualify, along with many other organizations. You can look up 501(c)(3) charities on the IRS website or the 501c3 lookup site.

If you donate your car and become audited, you are responsible for paying any penalties that you might receive. It's up to you to make sure you find the right charity and have all the documentation that you need for your taxes. For more information, contact local professionals like the Newgate School.

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