Donating your car to a charity seems like a no-brainer: you get to rid yourself of your car without hassle, and you get to write off the value of that car on your tax returns. It sounds like a really good deal, and in the vast majority of cases it is.
But when donating your car to an organization like Charity Motors, you should be aware of some tips that will help you make the experience a positive one, which will give you the maximum bang for your buck. Some of the keys to donating your car include:
One of the most important things to check off of your list first is to make sure that you’re working with a verified charity, and recognized as a charitable organization by the IRS. No matter how reputable or charitable they may be, if the IRS doesn’t recognize them as a 501(c)(3) charitable organization, it won’t do you any good. Organizations like Charity Motors can help you identify worthy organizations that qualify as 501(c)(3) organizations.
Non-profits typically don’t have a lot of money to work with, and if you make them come to you and pick up or tow the car, it costs them money up front, which in turn reduces the profit they make from your donated car. If you work with a firm like Charity Motors, that towing and pick up is free, but with others it may not be.
It used to be that you could simply claim the fair market value of the car on your tax deductions, and that was it. But with tighter restrictions from the IRS now in place, you need to make sure you value your car properly – not too high, not too low. Charity Motors can help you with this, and make sure the proper value is assigned to your car.
Remember, when you transfer the car to the non-profit, to complete all the paperwork necessary to completely transfer it. If you don’t, the car may still be yours, legally speaking. Which means, if the car gets a parking ticket, or is used in a hit and run, you’re still liable in the eyes of the law. If you work with an organization like Charity Motors, they’ll handle this for you. If you don’t, make sure the organization you donate to allows you to sign the car over to them completely.
Donations of things like cars – which can’t be measured as accurately as cash in terms of the value of the donation – will likely trigger an IRS audit, especially if you don’t have the right paperwork. There are specific forms you need to have, some of which is supplied by your chosen non-profit, and some of which you supply to the IRS.
Just as above, donating your car can be a very rewarding experience, both spiritually and financially. And, as long as you follow the tips above and make sure you stay on top of the process, or work with an organization like Charity Motors, you should have an excellent experience.