• Donating a vehicle to charity can be rewarding.yellow car, a honda japanese sport car model image by alma_sacra from Fotolia.com
  
  We have all heard the saying, "One man's trash is another man's treasure." This saying holds true for vehicles as well. Donating a car to a charity is a way to dispose of an unwanted or unneeded vehicle while helping someone in need of transportation. However, there are rules that must be followed in order to make the process smooth and beneficial for all involved.
  
  

Choosing a charity

• Before you give your car away to a charity, do some research. The charity must be an approved, tax-qualified organization in order for you to claim the tax credit. Ask the organization for documentation regarding its tax-exempt status, call the IRS or check online for a list of reputable nonprofit organizations.
  
  

Documentation

• The organization you choose must provide you, the donor, with written acknowledgment of the donation to be submitted with your current year's tax return. You need a record of the automobile's value. This can be found on a website such as NADA or Kelley Blue Book. If your donated vehicle is worth more than $500, you will need to attach IRS form 8283 with your tax return as well. The organization should notify you regarding what it intends to do with your auto donation, whether it resells it, gives it away to someone in need or even uses it for deliveries or to transport people to and from doctor appointments.
  
  

Itemizing your taxes

• In order to claim your donated car as a deduction, you must itemize your taxes. You will be unable to take the standard deduction. You will be required to file a long form 1080 and Schedule A. Keep track of all charitable donations in that given year to increase the benefit of itemizing. Also, it is important to remember that you must actually donate the car before December 31 for it to be an eligible deduction on that year's taxes.