You can apply for a car donation tax deduction in every state. But each state has different ways of verifying legitimate charities; some states require licensing and others don’t. It is also important to recognize that each state has its share of car donation scams in operation. Some may appear kosher but are actually crooked. So you need to do some checking up on any charity you are considering. Luckily, there’s a website that makes this a breeze, but more on that later.
But sometimes (otherwise) well-intentioned charities are not operating legally. 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. Sometimes the Secretary of State’s office handles charities. Regardless, you need to use due diligence before donating your used vehicle or truck to ANY charity.
The bottom line is you won’t get a car donation tax deduction if you use the wrong charity. But worse, the actual people who need the proceeds of your generous donation will not get squat. To get an idea of why it’s important to check out a charity before donating, just go to any state’s Attorney General’s or Secretary of State’s website. You will likely find somewhere on the site news of the latest car donation scam.
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. So how can you easily research a potential charity? Many states have websites where you can type the name of a charity into a search box. Many have databases of registered charities that you can access from their websites.
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. In fact, it could turn out that a registered charity gives only a tiny percentage of their proceeds from donations to the needy. So how can you do further checks to ensure a charity is not only legit, but is a ‘good’ charity?
…You would check with one or more of the several online ‘charity watchdog’ organizations. These types of services maintain lists of charitable organizations that meet certain criteria. 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 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!
The IRS (Internal Revenue Service website has good information on car donation tax deductions. Charites eligible to receive tax-deductible charitable contributions is listed on IRS Publication 78. Everything you need to know about getting a car donation tax deduction can be downloaded as PDF documents from their website. The main one you would want to download is called, “A Donor’s Guide to Vehicle Donation” (which is IRS Publication 4303).
The best way to ensure your vehicle donation tax deduction is to first see if the charity is legit. Simply click on your state at http://goodwillcardonation