Donating a Car

Tax Deductions with Qualified Charities

To take advantage of tax benefits, you must donate your vehicle to a qualified charity. A "qualified charity" is one the Internal Revenue Service (IRS) states can receive tax-deductible donations.

You can find qualified charities listed in the electronic version and the online version of IRS Publication 78. If you can't find the charity in which you're interested, it may be included in Eligible Donees Generally Not Listed in Publication 78.

If you need further assistance, visit the IRS Web site or call them at (800) 829-3676.

Research Your Charity

The IRS certainly knows its stuff, but that doesn't mean you shouldn't further research your charity of choice, as well as Mississippi-specific information about donating vehicles. Make sure you visit the following resources:

• The National Association of State Charity Officials (NASCO).

• The Mississippi Secretary of State.

• Mississippi's Office of the Attorney General.

• Sections 79-11-501 of the Mississippi Unannotated Code.

• Mississippi Charities Act Rules.

• Mississippi Charities Forms Library.

Tax-Deductible Donations Explained

The first step to making a tax-deductible vehicle donation in Mississippi is choosing a qualified charity. IRS Publication 4303, A Donor's Guide to Car Donation, thoroughly explains the rest of the donation process, but for your convenience you may first want to check out DMV.ORG's highlights below.

Your Vehicle's Fair Market Value

You can only deduct your vehicle's fair market value. IRS Publication 561, Determining the Value of Donated Property, helps you figure out your vehicle's fair market value―which differs from the Kelley Blue Book value―and determine how much you can actually deduct.

Limitations Regarding Tax Deductions

IRS Publication 526, Charitable Contributions, outlines the criteria for several limitations regarding tax deductions.

Important Forms and Other Paperwork

Even if you file your taxes electronically, there's plenty of paperwork you need to keep for your records. IRS Publication 4303 lists such paperwork. Most people who've made tax-deductible vehicle donations throughout the year need:

• A written appraisal of the vehicle from a qualified appraiser.

• Written acknowledgment of the donation from the charity.

• A completed copy of Form 8283 Noncash Charitable Contributions.

Remember to properly transfer your title to avoid any future problems.