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Step 1
Make certain that the charity you chose is a 501(c) (3) organization. The I.R.S. allows deductions only for donations to federally recognized 501(c) (3) non-profits. Contact the charity, ask for a copy of its I.R.S letter of determination and keep the letter for your records.
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Step 2
Take your car to a used car dealer for an appraisal. The I.R.S. requires a written appraisal if the car is valued over $5,000. Attach a copy of the appraisal to your federal tax return.
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Step 3
Find out if the charity you chose will keep the car for use or resell it. If the charity is keeping the car, your deduction may be the value of the appraisal. If the charity is reselling the car I.R.S. rules state that the deduction should be the amount of the sale.
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Step 4
Take photographs to verify the condition of the car. Photographs will help if there is an I.R.S. audit. Photograph the car, the vehicle identification number and the make and model to prove the car existed.
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Step 5
Keep a copy of the receipt the charity or its reseller sends. Attach a copy of the receipt to the federal income tax return as required by the I.R.S. Charities are not allowed to place a value on a car donation.
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Step 6
Deliver the car and the title to the charity or its reseller. Sign the title over to the charity. Ask when the title will be filed with the Department of Motor Vehicles and follow up to make certain it was done. Cancel your liability insurance after the title is filed with the state showing the change of ownership.
