If so, good for you! Donating a car to charity is a wonderful decision on many levels. First of all, your donation goes to help a great cause. Plus, you get your old vehicle or junk car moved off of your property free of charge. You are also recycling an old vehicle, and you also get to claim the car donation as a tax deduction.
In this post you’ll find some tips on how to donate a car in New Jersey and some specific requirements you should be aware of that relate to New Jersey car donations. To donate a car in New Jersey, you begin by submitting an online car donation form or calling the charity you wish donate your vehicle to. If you wish to claim the car donation as a tax deduction, be sure to check that the charity is an IRS recognized nonprofit organization. The process for receiving the tax receipt for your charitable donation may vary. Some charities will email you the initial receipt while others have the tow truck provide you with the receipt at the time of pick up.
This is just an initial receipt and enables you to claim a tax deduction of up to $500. You should check with the charity to find out what their procedure is for providing you with this receipt when you submit your vehicle donation. In the State of New Jersey, the license plates remain with the vehicle, so these should not be removed prior to the pickup. Filing a Release of Liability with the New Jersey Department of Motor Vehicles is an important step you do not want to miss when you donate a car. This document releases you from future liability which may arise for any reason after the vehicle is donated.
In New Jersey the procedure for filing a Release of Liability is that you must return the pink portion of the title or DMV form REG 138 to your local Department of Motor Vehicles. Alternatively, you can file your release of liability online at http://www.dmv.ca.gov. If your vehicle sells for more than $500, or if it qualifies for a fair market value tax deduction, you will receive additional tax paperwork after the sale of the vehicle takes place. The amount you will be allowed to deduct on your taxes will vary depending on several factors which could include the price the vehicle is sold for or whether the vehicle is classified as a fair market value car donation.
One last point we should mention is that if you plan to claim your car donation tax deduction on your 2012 taxes, you need to make sure you donate the car well before the deadline of December 31, 2012. The charity should have possession of the vehicle before midnight on December 31st, or at least have the pickup well in the works, in order for you to claim your tax deduction in 2012. Don’t wait till the last minute as there could be delays that could result in you being unable to claim the donation as a deduction for the current tax year.
If you have any further questions related to your car donation tax deduction, most charities are relatively knowledgeable about the process and paperwork needed, however, you should consult a CPA or accountant for specifics regarding your particular tax situation.
For additional questions related to car donations in New Jersey, you can contact your local DMV or visit the New Jersey DMV website for the latest information on state specific requirements.