Legitimate ways to donate your car to charity are available now. Learn all you need to know about the car donation process and its many benefits today.
Legitimate ways to donate your car to charity are available now. Donating your automobile not only benefits your charity of choice but it also benefits you financially. Certain conditions do apply. For example, you must donate your car to a qualified charitable organization. You must also itemize your taxes. If both conditions are met, your car donation becomes eligible for specified tax deductions. This also applies to airplane and boat donations as well.
Most car donation services are legitimate. A few are not, which means you need to research the charity to which you donate your vehicle prior to making the donation. Continue reading to learn all you need to know about the car donation process and its many benefits today.
Car Donation 101
Charitable organizations of all types rely on donations from consumers. Whether the charity supplies food, funding, housing or all-of-the-above, they all accept items and cash from a variety or sources. Donations are required for many of these organizations to operate and function properly as well. For example, many charities rely on patron-based funding to procure some or all of their working capital.
A car donation service relies on donations of multiple types of automobiles to serve its recipients. Yes, car donations are also possible to make directly to people in need without the use of a nonprofit or charity service. Charitable car donation services have access to databases unavailable to most private donors, however. This results in a car donation charity also having knowledge of a multitude of people in need of a donated vehicle across the country (and not just in your local or regional area).
How Does Car Donation Work?
Two steps take priority when preparing to donate your car. You need to know your vehicle’s fair market value. You also need to choose a charity with a cause you believe in. This latter step might not make sense if you only consider the “car donation” aspect of donating your vehicle. Come car donation charities are dedicated to U.S. veterans, however. Some are dedicated to parents with small children who have no vehicle to drive. Others still provide cars to victims of natural disasters.
Choosing Your Charity
Multiple trusted car donation charity organizations are available now. For example, Donate Car to Veterans helps U.S. veterans by awarding money procured from the sale of the cars it has received from donors. Cars for Veterans is another car donation charity focused on helping veterans today. Occasionally, a donated automobile is provided directly to a veteran in need of a vehicle in lieu of cash or other types of assistance.
Some of the top car donation services available today are facilitated by organizations with high-recognition names. The Red Cross operates an automobile donation program in tandem with the Insurance Auto Auctions (IAA) organization. Working together, the Red Cross and IAA help put drivers in need behind the wheels of quality donated cars nationwide. Both the Goodwill and Habitats for Humanity organizations also provide car donation services. Please find below a list of these charities and others, along with links to start the donation or recipient application process now:
The Red Cross (donate/apply HERE).
IAA online submission form (or call 1-855-92 RC CAR or 855-927-2227).
The Goodwill Car Donation department (also 855-910-8462).
Habitat for Humanity donation wizard (also 1-877-277-4344 or email [email protected]).
Charity Motors online form (or call 888-908-CARS ext. 2277).
Wheels for Wishes online donation form (also 1-855-242-9474).
Riteway Car Donations online form (or call 888-250-4490).
Tips on Car Donation Tax Deductions
The U.S. Internal Revenue Service (IRS) implemented a new law in 2005, which includes regulations pursuant to vehicle donations and their coinciding tax deductions. Prior to 2005, determining the correct and legal amount of deduction was a highly complicated process. Filing for a car donation-based tax deduction still has its challenges, however, including stricter rules. One challenge eliminated from the process is the necessity to determine value of your vehicle on your own without the help of the IRS.
Simply put, you are permitted to deduct the full selling price of the vehicle you donate if it sells for over $500. You are permitted to deduct the fair market value (FMV) of a vehicle you donate if it sells for $500 or less. Essentially, the eventual selling price of your donated car determines your possible tax deduction. “Possible,” is the operable word here because you also need to meet specific IRS-mandated requirements.
IRS Requirements for Car Donation Tax Breaks
To qualify for a car donation tax break, you are required to donate your car to a charity the IRS considers viable. This means the IRS has vetted the charity and determined it meets all necessary qualifications and standards. When you file your taxes, you must also choose to itemize your deductions. No options for car donation-based tax deductions are available when claiming the standard deduction amount.
Possessing and submitting the proper documents and forms is also vital. You will need multiple forms, although two documents take precedence over all others. IRS Form 8283 and Form 1098-C (Contributions of Motor Vehicles, Boats and Airplanes) are those two vital forms.
Finally, if the vehicle you donate sells for more than $5,000, you also need to provide the IRS with an independent appraisal as verification. Such appraisals might cost between $100 and $500, although most average under $200. This is an important step when you donate a higher-dollar automobile to charity expecting a tax deduction as a result
Categories of Donated Vehicles Accepted as Donations
Multiple types of automobiles and vehicles are accepted as donations. Each charity has its own regulations and guidelines, however. Be certain to inquire about whether your proposed donation will be accepted before paying for an appraisal or other related expenses. The following types of vehicles and automobiles are accepted by car donation charities today:
Various types of trucks.
Recreational vehicles such as motorhomes, trailers and fifth wheels.
Snowmobiles, all-terrain-vehicles (ATVs) and golf carts.
Fleet vehicles such as buses, vans, taxicabs, and shuttles.
Car Donations - Frequently Asked Questions
Q1: Does a car need to be operational to be accepted as a donation?
A1: Many charities accept non-operational vehicles as donations. The value of a non-working automobile will be significantly less than the value of one that is running, however. Please note: This will also impact your tax deduction amount.
Q2: How do I know my chosen charity is legitimate?
A2: Use the following resources to vet your charity and be certain of its legitimacy:
Q3: What happens if my donated car is not sold by my charity?
A3: Complete and submit Section B of Form 8283 if your charity does not or does not intend to sell your donated car. For all other tax deduction questions about your donated car, consult this convenient IRS-provided guide.
Q4: Do I have to deliver my donated car to my chosen charity?
A4: Most charities offer a verification and pickup service for donated vehicles. Call or write to your charity of choice to ask about their pickup services for your beneficial vehicle donation today.