The idea of donating a car to charity can be highly rewarding for both the giver and the receiver. When it comes to supporting a cause that you love emotions can cloud good judgment if you're not careful. You must learn to take a business approach to the transaction rather than allow your feelings for the cause to dictate your actions. Here are a few great tips for donating a car to charity to give you a little guidance when you're ready to make your contribution.

What To Look For When Choosing Your Charity

While you may have loved your vehicle all of its days of service to you, understand that others will not feel the same way; most vehicles donated to charity will be immediately sold in an auction in order to raise the needed cash for the organization. When that happens you'd be surprised to find that the charity will only receive a small fee for the car and the dealer will take the rest. One of the great tips for donating a car to charity is in order to get your maximum deduction for your car. Choose a charity that will put your car to use at least for a period of time before they opt to sell it. If not, look for an organization that will gift it to someone in need. This way, your donation will have more value when you claim your deduction with the IRS.

Try To Avoid Third Parties

Make sure that the charity you choose does not use a third party to handle the transaction. It is better to drive your car directly to the charity and give it to them. Whenever possible avoid using third party services including towing and pickup services so that the total value of the car goes to those who deserve it.

Verify The Non-Profit Status

Another great tip for donating a car to charity is to ask for verification that the charity is a non-profit organization and that they are able to accept and manage car donations. Ask for a copy of their documentation that identifies their tax-exempt status to include with your tax records and make sure that you get a receipt for your car when you make your donation.

Make Sure All Your Paperwork Is In Order

When you donate a car that is valued at more than $500, you need to complete Section A of IRS Form 8283 and attach it to your tax return. Once the car is sold by the charity, they must provide you with documentation of the sale to an "unrelated party" including the sales price in the paperwork. If the car has been used by the charity before the sale, this information must also be documented and sent to you as well.

Photograph Everything

Have pictures of your car and save all your receipts for any repairs or upgrades you've had done on the car prior to the donation. This will help in validating the actual value of the car when you're ready to claim the deduction.

Keep in mind that when you make a car donation, while supporting your favorite charity is important, you need to keep your emotions and personal feelings out of the transaction and handle the business of the donation first. There will be plenty of time to get emotional later after all the paperwork is done.