- 1). Decide on the charity to which you will donate your car.
Make sure the charity you have chosen is an official 501(c)(3) charity in good standing. You may do this through the Better Business Bureau, Charity Navigator and the Internal Revenue Service (IRS). Call the IRS Customer Account Services division for Tax Exempt and Government Entities at (877) 829-5500 (toll-free). The IRS recommends having the organization's official name and address available before you call. - 2). Check on your 1040 tax form to make sure you can itemize your deduction for the value of the vehicle. Also, keep in mind that the value of the vehicle "cannot exceed 50% of your adjusted gross income" according to the IRS. The deduction amount depends on how much the charity received upon sale of the car, the fair market value of the car if the charity intends to use the car, or the value of the car after improvements made upon it by the charity.
- 3). Transfer the title of the car to the charity.
- 4). Obtain a written acknowledgment from the charity once the car has sold. The charity will fill in the sale amount information. Keep this signed piece of paper, as you must include it with your itemized 1040 tax form.
- 5). File the paperwork you have accumulated during the donation process to give to your tax preparer at the end of the fiscal year for your taxes. You must have proof of the donation in order to claim it on your itemized taxes. Be prepared to back up the amount you are claiming for a deduction.
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