Check That the Charity is Legitimate
Make sure you’re donating to a reputable and legitimate non-profit. Search for groups that have a long history and whose information is in either a national charity database or the IRS’s tax-exempt organization database. Only the IRS can label a group as a 501(c)(3) organization. Even if you see the status stated on the group’s website or social media, you can confirm its tax-exempt status on the IRS website.
Beyond tax status, don ‘t forget that not all non-profits are made equally. Many folks like to look at a charity’s record of spending to make sure that they will use their donation effectively. Websites such as Charity Watch and Charity Navigator can aid you in confirming that the charity you’re thinking about has a solid reputation.
Transfer the Title Accurately
It doesn’t matter if you donate a car or sell it to a business or an individual, you’ll have to transfer the title correctly. If you don’t, you are legally responsible for accidents, parking tickets, or crimes committed by the next owner.
All legitimate non-profits will request that you transfer the title to them. They won’t ask you to leave that information in the donation paperwork blank. A few of the non-profits will sell your used vehicle at an auction in the future. If the car sells at an auction and the new buyer does not register the car, you are still legally responsible for any incidents or crimes.
Paperwork is Key
Make sure you receive paperwork for your donation and keep it. Taking photos, scanning copies, or storing your files in the cloud guarantees that you don’t lose them. They’ll be very important for any possible tax audits.
The IRS will need written acknowledgment from the charity if the value of the car is over $250. If the car is valued over $500 but less than $5,000, be sure to fill out Section A of the IRS Form 8283 and clip it to your yearly taxes.