People donate their vehicles to charity for many different reasons. They may have gotten a new vehicle, and do not like the amount they were offered for their old vehicle at a dealership, or through a private party. They may have an extra vehicle that they no longer have any use for, and they want to give it to someone in need. They may also know of a charity that will use their vehicle for purposes that they agree with and support, and want to be able to support that charity in any way they can. No matter what the reason is for donating your vehicle to charity is you will want to follow the tips given below in order to ensure that everything goes smoothly for both you and the charity.
The first thing you will want to do is find a charity that will work with you without a third party getting involved. If the vehicle runs, you will want to drive it to the charity location yourself. Do not use a towing company or a pickup service unless absolutely necessary. If you do this, the charity will be able to keep the full amount of any proceeds from selling the vehicle, rather than having to pay money to anyone else. This will also ensure that the vehicle gets to its proper location.
You will want to make sure that the charity you are donating to will accept vehicles as a donation. On top of this, you will also want to make sure that the charity you are donating to will allow you to make a tax-deductible donation. You can ask for a copy of the charity’s IRS letter of determination. This will verify its tax-exempt status, and you will have it for your records if anything comes up when you are trying to file this on your taxes.
If you are donating your vehicle to charity, ask them how they will be using the vehicle. This can greatly affect the amount of money you get with a tax deduction. If the charity is going to use the vehicle in its own operations, or they are going to give it to a person in need without selling it, you will be able to get a tax deduction based on the fair market value of the vehicle. If the charity decides to sell your vehicle, you will only be able to make a tax deduction on the amount that the charity sold the vehicle on, even if that is below fair market value.
You have to remember that you as the donor are responsible for a lot of the legwork, not the charity. You are going to have to fill out the paper work, and make sure you take the proper steps to get the vehicle title transferred correctly to the right people. You are also responsible for getting the value of the vehicle. If you do not get this information, you may be losing out on a great tax deduction, and the charity may be losing a good donation.
Be aware that donations like vehicles, or other non-cash donations, are one of the most common reasons that there can be an audit by the IRS. You are going to want to keep all of your documents, like the value of the vehicle, and any paper work from the charity in a safe place in order to prove that you did actually donate a vehicle to charity.
Donating a vehicle can be a great gesture. To ensure that you and the charity receive the maximum amount of benefits from your donation, follow these tips, and you will make a great donation that will not have any complications.