To do something for a good cause gives great mental contentment to the people. If you are really deciding upon donating your car in California, it’s a great decision indeed! Along with working for a charitable cause, you are also getting rid of the old vehicle, which would no more be giving you the trouble of paying taxes. This is a great cause along with which you may also benefit yourself by deducing the rate of tax being paid on the specified car.
You can take a short glance on the following tips, which would help you donate your car quite easily.
- For donating your car, you can either start by filling up online car donating form and submitting it, or directly call the charitable organization in which you want to donate your car. If you want to deduct your tax in return of donating the car, make sure you call up the IRS recognized non-profit organizations.
- The procedure for receiving the tax reduction may differ. Few organizations may e-mail you the preliminary receipt whereas; others may give you the receipt when they pick up your car. This is just an initial receipt which would allow with a tax deduction of upto $500. You must check this with your chosen organization, which process they would follow.
- In California, the number plaits the cars are licensed with, remains with the car and should not be removed before the pickup.
- You must not miss the step of filing a ‘Release of Liability’ with the ‘California department of Motor vehicles. This filing of document helps you get away from the upcoming liability which might show up after the donation of the car takes place. The process of filing the document is that you must give back the pink part of the title ‘DMV’ form ‘REG 138’ to the local Department of Motor Vehicles. The other way, you can also file such document online at this link: http://www.dmv.ca.gov
- If the car is sold for more than $500 or if you think that it has the quality of higher market value of the tax deduction, you would be receiving extra paper works related to tax, after the sale has occurred. The extent you can deduce the amount of tax, will depend up on several factors, which may include the price with which the vehicle is sold, or if the car is categorized as a fair-market car donation value.
- The last point we may include is, if you are planning to ask for a deduction of tax being placed on the car on a certain year e.g. 2013, you need to assure yourself that you donate the car earlier than the deadline of 31st Dec. 2013. The charity organization must have the car with them by the midnight of 31st Dec. 2013, or have at least the pickup well in works, so that you may claim your tax deduction in 2013. You should not wait till the deadline appears to be exceeded, as if there’s any delay you will be unable to claim a tax deduction on the car you are donating, the coming year.
If you need any further assistance or information about the car donation tax reduction, the charity organizations are quite informative about all the procedures and the paperwork needed. However, you may also consult or appoint a CPA or accountant for knowing the specified information regarding the tax situations.
For any additional queries related to the car donation system in California, you can also contact the local or regional DMV and visit their website for any new information.