Donating Cars to Charity – 3 Tips To Get It Right
The concept of donating cars to charity sounds so simple – just park it in front of the charitable organization’s office, give the keys and papers to the staff and walk away feeling that you have done your part in helping you fellowman. But that’s just not the case in the United States where your generous act to give car to charity entails tax rights and responsibilities.
Rights and Responsibilities
Yes, you have the right to deduct the actual value of the donated car in your income tax declaration on the year when said vehicle was actually donated. Yes, you also have responsibilities to complete the paperwork, to ensure that the donated car was actually provided to an eligible organization and to be truthful in your tax declaration.
Indeed, the road to being a generous philanthropist is paved with taxes, thus, proving the adage that there are two things in life one cannot escape – taxes and death. You may have to pore through provisions of the law when it comes to donating cars to charity – or any other non-cash and cash donations, for that matter – so as to ensure that the taxman will not come knocking on your door about what truly is an honest mistake.
If you think that these rights and responsibilities take too much time, effort and money, we suggest hiring an organization to do the dirty work, so to speak, for your benefit. Usually, these online organizations will facilitate the donation by taking care of the paperwork and by ensuring that the organization is eligible.
Tips and Advice
Of course, you can also perform the process of donating the car to a favorite charity. At the very least, you will be assured that the car will be provided to the charity instead of a middleman taking 50% of the proceeds from its sale.
If you do decide to give car to charity, you are well advised to remember the following tips and advice. You can even apply these tips in choosing the organization that will help you legally complete the process of donating cars to charity.
- Find an eligible charity. Your best sources are the Better Business Bureau, the Internal Revenue Service and the Charity Navigator. This way, you will know the status of the intended recipient especially as there are private and public organizations that may not qualify under IRS rules for tax deductions on charitable donations. If you are using the IRS to find eligible charities, log on to their site, input “78″ on the search field and then choose from among the listed organizations.
- Deliver the car yourself. If you let the charity pick it up, the costs will be shouldered by them, thus, lessening the value of your donation.
- Transfer the ownership of the vehicle. You should always make sure that the papers in this regard are complete. You should inform the state’s department of motor vehicles as well as state the new owner of the vehicle on the charity donation papers. The paper trail is very important in donations.
This is not to discourage anybody from donating cars to charity. We are only saying that your altruistic motives for doing so should be tempered by the legal rights and responsibilities that come with every donation.