April 11, 2016
How To Donate A Car To Charity
Are you thinking about getting a new vehicle? Maybe you’ve been dragging your feet because you don’t want to deal with the hassle of selling your current car. Here’s an idea: donate it instead. Not only does a car donation save you the headache of selling, but it also makes a difference in the lives of other people. With Veteran Car Donations, you can help hurting heroes who have served our nation and now need some extra support.
Ready to learn more? How does a car donation work, and where do you get started? To make the process as simple as possible, here’s a quick guide on how to donate a car to charity
1. Decide Where To Donate
The first step in donating a car is to do your homework. Thanks to modern technology, it’s simple to gather important information about different charities, their reputations and how they operate.
When you are researching where you would like to donate your car, make sure that you choose a reputable nonprofit organization, such as Veteran Car Donations, that is eligible to receive tax-deductible contributions. If you are planning to use your donation as a tax deduction, it must be to an IRS-approved 501(c)(3) to qualify. If you want to verify this status, you can ask for the organization’s IRS tax-exemption letter, or you can look it up on the IRS website online.
2. Choose How Your Car Will Be Delivered
The next thing you need to consider is how you will physically donate your car. For example, when you choose to donate your vehicle to Veteran Car Donations, we will pick up and/or tow your vehicle for free — at a time and date of your choosing. You don’t want any added expenses or hassle trying to coordinate a drop off when you are trying to donate something.
However, if you’d prefer to drop off the car yourself, make sure it is road worthy. You will also need to provide the original title so that all parties can sign.
3. Get a Receipt
If you plan to claim your donation for a tax deduction on your income taxes, you need to make sure your get a receipt for your donation. Charities are supposed to provide you with a receipt within 30 days of selling your car. At Veteran Car Donations, we will mail you a receipt after the donation occurs.
If your car will be auctioned off, you can receive a deduction for the amount your vehicle is sold for, and you should expect a receipt after the sale. Always follow up and make sure you get your receipt, because you will need it when you file your income taxes.
Also, according to Edmunds.com, the IRS is more likely to audit non-cash donations, so you will want to keep the receipt…just in case.
4. Itemize Your Tax Return
The final step in donating your car is to itemize your tax return when you file your taxes. In order to get the biggest bang for your buck, make sure that the amount of your donation plus your additional tax-deductible items equal more than the standard tax deduction.
If the car you donate has a sale price or fair market value that’s higher than $500, you will also have to complete Section A of IRS Form 8283 and include it in your tax return. If the value is higher than $5,000, you will need to get an independent appraisal and complete Section B of IRS Form 8283. Check the Kelley Blue Book, the Hearst Black Book or the National Auto Dealers Association for fair market values.
When you donate your vehicle, you will typically need to provide a valid title, although requirements vary from state to state. Also, for the sake of claiming a tax deduction, you’ll want to obtain documentation from the charity about your donation. This documentation should include your name, your vehicle’s VIN number, the date of your donation and a statement describing what you received in exchange, if anything.
How Much Do You Get for Donating a Car?
It depends. First of all, you can only take a deduction for a car donation if you’re itemizing on your return. Assuming you are not taking the standard deduction, you can deduct the fair market value of the vehicle if one of the following is true:
- The organization to which you donated is using the car in its regular operations.
- The charity is selling or donating the vehicle to someone needy for below market value.
- The nonprofit is improving the car so that it can either use or sell it.
If none of those statements are true, you can only deduct the amount that the charity receives after selling the donated automobile. You will need to provide a receipt from the charity to the IRS verifying that amount.
How Do You Choose To Which Charity You’ll Donate?
To make a donation that’s tax-deductible, you’ll want to give to an organization that has 501(c)(3) nonprofit status with the IRS. You can also research different charities using CharityWatch, which rates nonprofits in their efficiency for supporting their causes.
How Do You Find a Local Charity?
When you’re researching charities, pay attention to where they’re stationed and if there are locations near you. When an organization is in your area, it’s easier to ask around and get feedback. You can also visit the nonprofit in person if desired.
At Veteran Car Donations, we have a presence and accept donations in all 50 states, plus the District of Columbia. If you’re looking for the best car donation charity near you, you can’t go wrong with us.
Do Most Charities Offer Free Pickup?
Many charities will offer free pickup for donated vehicles, which can give you extra convenience.
With Veteran Car Donations, we’ll come to you at the time and date of your choosing, hauling away your car at no additional cost.
These simple steps make it easy to donate your car. Not only is auto donation an excellent way to get a tax deduction, but your contribution will be helping a person, business, or community in need.