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Donate Car For Charity Tip: Remember how careful you were in negotiating prices and looking for the best value when you bought your vehicle? You need to be as savvy when you turn to car donation services to dispose of unwanted cars. Sure, you can get the tax write-off, but there are potential pitfalls along the way.
-- The charity needs to be a 501(c)3 nonprofit for you to claim a tax deduction.
-- You need to document the gift-giving and show proof to the IRS at tax time.
-- The title must be transferred to the charity, or the donor could face problems legal problems from unpaid parking tickets and traffic violations that belong to someone else.
-- Make sure the charity will dedicate a large portion of its proceeds from car donations to charitable causes. Some charities have high administrative costs with little money going to causes and programs.