Direct Donation

• When donating your car, you must consider the method by which you would like to donate. If you would like to give directly to an organization that will keep the vehicle, you may contact them directly. Nonprofit organizations with clients in need of a vehicle will then transfer the title to the clients they serve.
  Oftentimes in domestic-violence shelters, clients do not have their own transportation. In this case, donations can be used for the client to get a job or take their children to school. This gives the recipient a renewed sense of freedom and independence.
  
  

Proceeds Donation

• You may also donate your vehicle using a resell or online service. These services provide the donor the opportunity to give proceeds to a local charity of his choice. You will not have to go through the hassle of selling or trading-in your vehicle. The car will be towed at no expense to you, and paperwork will be provided for a fair-market-value tax deduction. You can feel great about helping families in need.
  Feel free to donate vehicles that do not run. Unrepairable vehicles can be sold for parts, with those proceeds benefiting a charitable organization.
  
  

Research the Charity

• You must keep a few things in mind when donating your vehicle to charity. Always do your homework. Check with local charities to ensure the resell or online service is legitimate. Legitimate services will withhold 5-8% of earnings to cover their costs and make a small profit, the remaining 92% will go directly to your chosen charity. Some services may withhold up to 50% of earnings from the nonprofit organization. Also, ensure that the charity you choose is a government-approved organization. To qualify for a deduction, your selected charity must be an IRS-approved 501(c)(3) organization.
  
  

Tax Deduction

• Once the nonprofit is verified, you will receive a tax deduction for your donation. But if the car is worth more than $500, you must complete Section A of Form 8283. If the car is valued at $5,000 or more, complete Section B and include them with your taxes. As mentioned, nonprofit organizations with clients in need will give the car to those clients. Ensure you transfer the title to avoid parking tickets and traffic violations on your record. Never leave the ownership space on charity-donation paperwork blank.
  
  

Helping the Community

• There are numerous things to keep in mind, but also remember that you are doing a service to your community and helping those less fortunate. Donating a car to an individual or charity is a selfless act with benefits that are also tax-deductible.