If you’re thinking of donating your car or truck to a local or national charity, here are some tips you should know. There are some problems you can avoid if you do a little research first. Ultimately, your goal may be to get a nice car donation tax deduction. Changes in tax laws now make it easier to get a good deduction.
1. How the car donation charity uses your donated car. Decide whether or not it is important to you if you know how the charity is going to use your car. If so, you may want to give them a call. They may sell it at a used car lot they maintain or give it to a charity car donation program or sell it at their own car lot. They may use the car to transport people or goods for their charity work. Or they can give the car to a person in need.
2. How much money will the charity actually make from your car donation? If the charity plans to sell the car, it probably won’t get the ‘blue book’ value of the car. There will also be expenses directly related to the sale: newspaper classifieds or car lot costs, both of which will reduce the negotiated sales price.
If they give it away to a car donation charity program, which they have contracted with, to sell, they will get much less for it. And, of course, if they use it themselves or give it away, then there will be no monetary gain.
3. Before donating your car to any charity, make sure it is a legitimate charity. If it is a large national organization, there will be fewer problems. If it’s a local charity, you may need to do some checking. You want to make sure they are eligible to receive contributions that are tax deductible, so you will receive the car donation tax deduction. So ask them if they have the “determination letter” from the IRS.
Many charities accept cars, trucks and other vehicles and are not required to give you a tax deduction. Be sure to find this out ahead of time.
These are just some of the tips you’ll need to know if you’re planning to donate your car to charity. Be sure to do some research first to make sure you understand how much you can get for your car donation tax deduction if you sell it, give it away, or keep it.