So you have an old car that you want to get rid of but you want to avoid the hassle of selling it? Here’s your answer, donate it! By donating your car you can take advantage of the nice tax write-off you can receive the following year. The two main things you need to know when it comes to donating a car for tax deduction purposes is that the fair market value of the vehicle and what the charity you donated it to does with the car. There is one other thing you should know about donating your car for a tax deduction. If the car happens to be worth more than $500 and the charity decides to sell the car, you have to make sure that you find out what the exact final value of that transaction was.

Start off by checking the fair market value of your vehicle, an excellent online resource to determine that value is the Kelly Blue Book, this is what is commonly know as the ‘blue book’ value of your vehicle that almost all institutions use. Once you have correctly estimated the fair market value, deduct it. This will help ensure that you get the most value for your vehicle. It is also wise to speak with your accountant, in Spanish they are called contadores, they will have the best advice on this process. But to do it yourself, read on.

The second thing to do is find who to donate the vehicle to. Start off by verifying the eligibility of the organization that you are donating to. Check with the Better Business Bureau (BBB) to see if the company is truly legitimate and if they have had a good track record from people who have donated to them. Charities like Goodwill and the Purple Heart are good to start out with as they have long had a great track record dealing with these kinds of donations.

Keep every piece of paperwork given to you in this whole process because your contador will need to see them to properly prepare your tax return forms.