The ABCs of Car Donation - D is for Document

Document everything between you and the charity you donate your car to. You will need these documents when you do you taxes or if you are audited by the IRS.  If you cannot provide the proper documents regarding your car donation you may not be able to claim the tax deduction.

If you complete an online car donation form, print the form. If you speak to someone on the phone, make notes including the name of the person. You should also make a copy of the title to your car and lien release if there is one. It is also a good idea to take some pictures of your car. If the IRS disputes the amount you claim for your car donation, pictures will help you prove your case.

Many charity car donation centers will ask you to mail your title to them. They ask you to mail the title because it is safer for you to have the title in the hands of the charity rather than those of the tow truck driver. Most towing services pickup automobile donations for multiple charities. Therefore, it is very easy for them to get the paperwork mixed up and leave a receipt from a different charity. Keeping all the communication between you and the charity actually simplifies the process. When you mail your title, make sure to mail it certified, priority, registered or overnight. That way you will have a tracking number. That tracking number and post office receipt will be a record of your car donation.

If you decide to allow the towing service to pick up your title along with the car, make sure the tow truck driver signs a statement acknowledging your donation. Never leave the title in the car and allow the towing service to pick them up without anyone being present. If you do and the tow truck driver fails to leave a receipt, you have no auto, no title and no documentation of your donation.

Whether you mail your title to the charity or give it to the towing service, it is very important to keep a record of the name and phone number of the towing service. That way you will know who ultimately took possession of your car.

Once you donate car to charity they will send you an acknowledgement of your used car donation. Most charities sell donated cars. If that is the case with your car donation, the charity is required to send you IRS Form 1098-C if the vehicle is sold for more than $500. If the charity keeps you car donation for their use, makes major repairs to it before selling it, or gives it to needy person, they are required to send you a letter indicating that. It is very important that you keep the letter or 1098-C form from the charity. You will need this documentation to claim your tax deduction when you file your taxes.

Keeping all the documentation when you donate your car to charity will also protect you if you receive any notices, etc. from the Department of Motor Vehicles. It often takes States several months to record title transfers in their computer systems. If your car donation is sold in a neighboring State, the title transfer will not be recorded in your States system.