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Friday, 9 February 2018

10 Facts on How Car Charity Donation Program and Insurance Works

If you've been doing any research into what is required for donating a car. Having a car that has been park for a particular period of time or fallen into disuse over the years is common for many middle class families. Perhaps the car is no longer in style. Maybe it belonged to a child who no longer needs the vehicle.
Car donation is an option considered by many families and individuals. An unused vehicle presents an opportunity to do good for your community. However, Federal regulations around donating your car have changed recently. As a result, there is a lot of misinformation saying that car donation is a financially poor choice. Let's look at the facts.

1. Understanding How the Program WorksThe key is carefully selecting a charity of your choice with a past history of positive performance. Before donating your car, it is important to know some common Do’s and dons. Doing a little homework will help you make sure that your donation makes the most impact.

2. Beware of 3rd Party Car Donation Programs that Advertise a LotBeware of 3rd party Intermediary organization typically sell away donated vehicles in bulk and then to give a portion of the proceeds to a charity. In such situations, it is not unheard of for charities to receive a mere $50 per car in the car donation process.

3. Make One on one contact with the OrganizationSpeak in person, Talk directly with the representatives of the organization you wish to receive your car donation in person when possible (face-to-face is always the best way to go).

4. Make Sure the charity Donation is formal to the organizationTransfer the car title correctly to the charity Make sure to formally sign your donated car over to the charity organization you have chosen. If the charity requests you not to indicate clearly the assignment of ownership of the car, beware. Find another charity. Also take note that if you continue to officially own the car, you will be held responsible for any and all illegal activity that happens using the car, including parking tickets and worse.

5. File the right formsThe form first asks for your personal information. Your name, birth date, street address, and social security number are requested. Then, you must fill out the location of the car if it's different from your street address and finally, a description of the vehicle.

This information is always kept strictly confidential.File the right forms If your vehicle is worth over $500, you are required by the IRS to attach IRS Form 8283 to your tax return. For cars worth more than $5,000, tax documents must include an external appraisal, in addition to proof the donation took place in the form of a receipt from the charity organization, evidence of the title was changed.

6. Remove your car license plates before donationTake off your license plates many people forget this step. Before donating your car, remove your plates and return them yourself to your local DMV.

7. Taking note of the representatives who receives your car donationTake note of the representative who receives your car donation Upon receiving your donation, make sure a representative of the charity records your personal information, as well as details about your car, includes its year, make, model, VIN, mileage, license plate number, title number etc.

8. Don't give out your SSN too soonDon't give out your SSN too soon You should only be asked for your SSN if your car donation is worth more than $500. If so, your SSN could be needed to complete and properly file Form 1098-C with the IRS.

9. Tax DeductionWhen considering a tax deduction, know when to use Fair Market Value (FMV) for the car Fair Market Value (FMV) of your car based on listings from Kelley Blue Book can be used to determine the worth of your car in lieu of evidence of the sale price when the charity keeps and uses the car instead of selling it, or it is worth under $500. If not, the sale price of the car by the charity at an auction shown on the receipt from the charity is the only amount you can deduct.

10. Car Insurance CancellationHow to cancel your car insurance, just like the case of selling your car to a person or dealers, you'll no longer need insurance coverage once the title is transferred. You may even be refunded by your insurance company, an added bonus.

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