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Step 1
Have the year, model and make of your car as well as its general condition ready.
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Step 2
Log onto Kelley Blue Book (see a link in Resources below) and input all information mentioned above: year, model, make, special features, any damage to the car.
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Step 3
Obtain the value of the car. Kelley Blue Book (KBB) will give you an estimated value for your car based on the information you have put in. You can obtain an estimate based on whether you will be selling it to an individual or to a dealer. In some states, charities that accept car donations are considered dealers. In cases where a charity is not considered a dealer, the charity will still, for the most part, sell its cars to a dealer. If your car is worth more than $500 you will need to obtain proof of donation; stating the actual price for which your car was sold by the charity.
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Step 4
Donate your car and obtain proof of donation if necessary. Most charities can pick up your car or will work with a car donation company to have the car picked up.
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Step 5
Use the value obtained either from your KBB calculation or provided by the charity when preparing your tax return. If you are using a tax preparation software such as Turbo Tax or Tax Act, all you will need to do is answer a question about whether you made a vehicle donation and its value, and the deduction will be accounted for in your tax return. The amount of your taxable income (your gross income minus all allowed deductions) is reduced by all the deductions you claim. For example, if you donated a car that sold for $3000 and your taxable income is $20,000, your taxable income becomes $17,000. You are then charged a percentage of $17,000 as tax according to your tax bracket.
