Of all the things you can donate to charity, your car may be one of the best options. There’s nothing wrong with other items, of course. People definitely need clothes and non-perishable items. The problem is that many people also need a vehicle either for their family’s sake or to support a job. But, as you know, vehicles cost a lot of money. So you’d be doing someone a huge kindness by learning how to donate your car that you’re not using anymore to charity. Before you do, though, remember the following tips.
There are countless charities that will accept car donations. If receiving a deduction is a concern, you’ll want to make sure the charity qualifies and confirm this on the IRS website. However, beyond that, you’ll probably want to know what they’ll do with your vehicle.
Many charities focus on a specific type of person in need. Veterans, disabled individuals, women who have experienced abuse, families living in shelters, those trying to transition from public assistance to self-sufficiency; these are just some of the many groups charities specialize in.
Some charities to consider that have solid reputations include:
Again, for a complete list, you can visit the IRS’s website or speak to your local DMV.
The charity you choose may also have more to do with your vehicle. Some will only take those that are in working order (they must be for a tax deduction) while others will take complete junkers off your hands.
Many charities make donations as easy as possible. You just fill out a form online, they come and pick it up, take the title off your hands and that’s it (if you want a tax receipt, they’ll mail it to you after the valuation/sale).
However, others will operate through a third party. This isn’t a bad thing, it just means you need to coordinate with this group as well. If the charity is local, you may also want to look into driving the vehicle there yourself, using a dolly or hiring the tow truck yourself to help them save money.
Obviously, you probably want to clean the car out and get it looking its best for the charity. However, preparations should also include collecting receipts for upgrades or things like new tires, to help bolster your claim to its value.
Know, too, that if your vehicle is worth more than $5,000, you’ll need an independent appraiser confirm this. The IRS pays special attention to non-cash donations, so something this sizable will definitely set off red flags in their system if you’re not careful.
If you are unsure of the value of your vehicle, check out the Kelley Blue Book.
This is 100% your responsibility, no matter what the charity says. The IRS holds the donor responsible for the vehicle’s valuation, not even the group that sells it.
Other than that, make sure you have the title for them to take. Go to the RMV if you’ve lost yours and need a new one. Whether the charity is selling the car for proceeds or donating it to a need individual, they still need to transfer title.
In order to deduct your car donation from your taxes, you’ll need two things. First, as we mentioned, you have to go through a legitimate, approved philanthropy. Second, you need to get receipt for your donation. Without one, you can’t write the donation off. It’s also important to keep it for your records in case you get audited.
Learning how to donate your car doesn’t take more than just following the above steps. You’ll then be well on your way to helping out a truly grateful group of people.