With countless charities accepting car donations, choosing the right one to donate to your car can be overwhelming. If you are ready to donate your vehicle, follow our guide to find a suitable charity.
Is your car donation tax-deductible?
Donations are tax-deductible only if the chosen charity has been recognized by the IRS as a tax-exempt organization. Most of the time, tax-exempt organizations are referred to as 501 (c) (3) organizations. Do not hesitate to ask their charitable status is convenient for donors and you can also look up the name of a charity on the IRS website.
Also, keep in mind that charitable contributions are only tax-deductible if you include your deductions in your annual tax return. If you do not deduct, your charitable gift will not be included in your tax calculation.
Used for your donated car
The IRS needs charities to use a donated car in an accurate way. You can expect your car to be used as follows:
The charity will use the car to carry out activities related to its mission.
For example, if the charitable organization has the task of planting trees and flowers in poor areas, your donated car can be used to transport gardening tools and supplies.
The charity sells the donated car and uses the proceeds to promote its charitable activities.
The charity gives the car away to a needy person as long as the charity’s job is to help those in need of transportation.
Sometimes a charity hires its company to manage the auto donation program. If this is the case, check once again whether the vehicle donation is tax-deductible. Sometimes the deduction is not taken when a company is involved. In this case, the charitable association will probably also pay a fee to the hired company, so they will receive less from donated cars.
Choosing a charity for donated cars
Choosing a car donation charity can be difficult. There are a few ways you can interrupt the process to make it a little easier.
First, think about why you want to donate a car. If you know that, you can find charities in this area who accept cars as donations.
Next, take a look at the list of nonprofits you’ve developed on a review site such as Charity Navigator to learn more about how well the nonprofit works. The hardest thing to do is to restrict the selection of several runners-up to the final winner.
If you are not interested in the charity and you just want to donate a car for tax relief, try a website like DonateACar.com. In this website only, part of the value of the car becomes charitable.
When you donate a car, you should also know what steps are required to make the gift.
Do you have to drop off your car and get someone to bring you home?
Alternatively, will the charity pick up your car? Ask chosen nonprofit association.
There are also many specific requirements of the IRS regarding the type of receipt you need for your files and how to calculate the value of your vehicle. You should understand this before you donate cars to charity.