Need a quick tax credit or rebate? Donate your car to charity!
This may sound completely strange, but it's a fact that you can actually get a financial gain by donating your car to charity. Unless you are a Rockefeller or your last name is Kennedy, you probably don't have many shiny news cars simply just laying around your driveway, but you would be surprised just how easy it is to obtain a tax credit for donating your old car to charity.
It seems like every charity from breast cancer research to the Make-A-Wish Foundation to military organizations are accepting automobile donations. There are a few things to consider that can really help you through this process. In a nutshell, many of the "not for profit" groups accept car donations so they can be resold as actual automobiles, broken down for parts, or even recycled. There are tons of things that can be done to actually make money from a car that is donated. The concept is pretty much just like when you drop off a box of clothing to Goodwill or the Salvation Army, you'll get a receipt that you can take to your tax preparer at the end of the year that can help you get a tax credit which can be very valuable based on your tax tretun information.
- Donating Your Hard Earned Money To Charity: How To Make Sure It's A Good Cause
With so many "charities" operating in the US, how can you be sure that your money is actually being used for it's intended purpose? It turns out there are multiple ways to checkup on your favorite charities.
So just call the number on the billboard?
You have probably seen the billboards that silly say "Donate Your Car To Charity"! Odds are if there is no specific charity mentioned, they are a clearing house for car donations. Many companies operate like a middle man for donations, and often times get away with a huge percentage of the actual value of the car and not much really ever gets to the charity you selected.
So how do you find a charity that accepts cars? Simple, just ask them! You probably have a favorite charity, so call them up and tell them what you have and if they can accept it as a donation. If your favorite charity doesn't want to be bothered with it, or quite possibly they have never had an automobile donated, they odds are they can at least point you in the right direction. Do your charity a favor though and contact them directly. More profits will actually get to your charity of choice.
A few Things To Remember:
- Remember, in order to be a tax break, you must donate your vehicle to a 501c3 organization.
- Do you really want to help out? Sure they might be able to do a pickup of the vehicle, but if it still runs, consider dropping it off instead of having someone come get it. This will save them a couple bucks.
- Know how much your car is actually worth. If you attempt to take a $23,000 tax credit on your next 1040-EZ, remember you'll need to be able to back that up. You might want to check the Kelly Blue Book value or some car dealerships such as Carmax will give you a free written estimate of the value of the vehicle.
- Remember, once the vehicle is out of your possession and control, be sure that you file the appropriate title paperwork with your state. You really don't want your awesome donation to charity to cause you any future hassle if your car is resold instead of recycled.
- For the love of Pete, keep accurate records! If you ever get audited by the IRS they will want to know why you deducted the amount you did. Just use common sense.
My family has a pretty bad track record when it comes to old vehicles. Growing up in the woods, when you got a new car, you just parked the old one outside the house in the woods and eventually is just sorta disappeared. (Meaning from decay and rust, not theft!) This was either because of the care ultimately getting ruined in the weather, or it would be parked out of the way newer a tree line, and nature pretty much engulfed it. I can think of at least 5 cars off the top of my head that were always around the house. If only my family had the forethought to actually make a charitable donation out of their car, they would have saved thousands of dollars! Not only in taxes, but in the amount paid to eventually tow the vehicles out of the tree line. Bottom line donating vehicles isn't for everyone, but with a little research could prove to be very rewarding!
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