Donate a car to charity - Used Car Donation:

There's nothing better in life than to help those less fortunate with things that you don't need anyways. Giving a used car to charity is an excellent way to give back to the community and get a tax deduction at the same time. The IRS allows for you to take a tax deduction when you give your vehicle away to a certified charity like Goodwill. The car has to be in good working condition (driveable at least) in order for the donation to take place. There is such thing as "fair market value" that you will need to get paperwork on when donating your used car to a charity. As we researched this topic online and viewed both the IRS.gov site and other charitable websites that offer car donation programs, we soon found that many of the programs out there for donating cars are not recognized by the IRS in the way that many of us think they are. The IRS says that many organizations claiming to help with giving your auto to charity are actually profiting from the sale of the car and therefore eliminate the tax deductible part of the donation. Go with a company or organization that you either have experience with or a friend/family member can recommend. No sense in giving your car away if there is no tax deduction involved.

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The Internal Revenue Service (IRS) allows you to donate your old car to a recognized charity in order to get a tax write off. Some helpful tips from IRS.Gov on donating cars to charity are as follows. Make sure the organization you donate your car to is qualified or else your donation will not be tax deductible. You can use the IRS website to check on an organization if you are not sure. Publication 78 is an annual list of qualified organizations. Churches, synagogues, temples, mosques, and governements are not usually listed in Publication 78, but donations to these institutions are tax deductible. In order to benefit from a donated car, you must itemize on your tax return. A donor of a car must calculate the "fair market value" based on many factors like mileage, general condition, and accessories. Eventhough some car donation programs may allow you to deduct the highest value listed in a used car buyers guide, you are only supposed to take a deduction for the fair market value. File the proper forms and get a certified receipt in order to document the charitable contribution deduction properly. Donors with questions about whether a contribution is deductible should call the IRS at 1-800-829-1040. You can go to Donate-a-car.org and call their 888 # to get details on how to donate in your state.

Car Donation Programs

Most car donation programs are legit and you will have no problem deducting your cars fair market value on your current year tax returns. However, the IRS does mention that some car donation programs will put your donation in jeopardy. There are 4 types of car donation programs - the charity uses the vehicles or distributes them to the needy, the charity sells the vehicles and uses the profits to fund its charitable organization, the charity hires a for-profit agent to operate the car donation program. The first 3 types mentioned above are ok, but the last type mentioned next is questionable - "The charity allows a for-profit entity to use its name to solicit car donations, receives a fee or percentage from the sales, but has no control over the for-profit organization's activities". "Contributions to this kind of vehicle donation program are not deductible, even if the nonprofit uses the money it receives to fund charitable activities". Some reputable vehicle donation programs are Donateyourcar.com (American Lung Assocation) and Carshelpingpeople.org. Be sure to research the organization and make sure your automobile donation will be tax deductible.

Car Donation: Goodwill vs Salvation Army:

If you want to donate your car to charity, then we suggest looking to the car donation programs offered through Goodwill and the Salvation Army. Most Goodwill agencies accept car donations and some of the vehicles are used in the Wheels To work programs that help people get to work with reliable cars. You can deduct only the proceeds the charity gets from the sale of the vehicle. Car donors must get a written acknowledgement from the charity that includes the sale price of the car. If Goodwill uses the vehicle in the Wheels to Work program, then donors can deduct the fair market value of the car. The Salvation Army is very similar in that you need to have an operable car, truck, RV, motorcycle or boat and then you can donate it at your local drop off point. From experiences with friends of ours, it is somewhat easier to donate a car through Goodwill with the proper paperwork through their Wheels to Work programs.

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