Car Donation Tax Deduction - Best Way To Get Yours

While the vehicle donation tax deduction you can get is the same everywhere, the way each state qualifies and verifies charities is not the same. It is also important to realize that each state has its share of vehicle donation scams running. Some may appear legit but are actually crooked. So it pays to do a little detective work first. Fortunately, this is easy and quick to do via a website setup for this. (More on that later).

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. And sometimes the Secretary of State's office handles charities - not the Attorney General's office. In any case, you should exercise 'due diligence' before selecting a charity to take your donation.

...After all, if you donate your vehicle to the wrong charity, you won't get your vehicle donation tax deduction. But the worst part is the folks who need your donation (or proceeds from your donation) will not get it. 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.

The bad part is there seems to be a continuous supply of scam charities popping up. 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? 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 what further checks can be done to make sure a charity is a good one, in addition to being legal?

...You would check with one or more of the several online 'charity watchdog' organizations. They keep a database 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.

Applying for a car donation tax deduction is likely one reason you have for donating your car or truck to a charity. The best thing you stand to get, however, is that feeling of having done a good deed that will help out someone or some family who needs your help. So make sure you are able to get both: Check out a charity the right way!

On the IRS website you can find good info on vehicle donation tax deductions. The IRS Publication 78 is a list of charities that are eligible to receive tax-deductible charitable contributions. There are also downloadable .pdf documents on their site that explain everything about car donation tax deductions. These include IRS Publication 4303, "A Donor's Guide to Vehicle Donation."