What do you do when you have an unwanted car? The first thing that comes to mind is to sell the vehicle, but, you should know that it can be hard to get a good deal in the current market. Plus, you may have to do some repairs to the vehicle because it’s unlikely that an unwanted car will be in tip top condition. Also, you will have to deal with enquiries and visits from interested buyers who want to take a closer look at the vehicle, only to let you know that they will have to consider further. Now, you can avoid all the hassles and simply donate your unwanted vehicle.
Why Donate My Car?
A great incentive for people who donate their cars to charity organizations is the tax deduction. A tax deduction lowers the taxable income so it means that you will be paying less tax. In 2008, the number of cars donated to charity organizations were 251,970 and the tax deduction amounted to a total of $443,729,000. These numbers excluded taxpayers who donated their cars without itemizing the deductions or taxpayers who claimed a non-cash charitable contribution with amount of $500 or less. Depending on the charity organization of your choice, your donated car may go to a low income family or it may be sold by the charity organization to fund their causes. If your car is not functioning, it may be sold to a junkyard where it can be recycled to produce new vehicles. It can also be very convenient to donate your car because most charitable organizations will remove and tow your unwanted vehicle free of charge.
How to Donate Your Car
When you have decided to donate your car, you will need to find out the fair market value of your car. For the purpose of claiming a tax deduction, you will also have to obtain and complete the required paperwork. According to the IRS, you can only qualify for a tax deduction if you itemize the deduction which is found in Schedule A of Form 1040. The amount of deduction is dependent on what the charity organization does with the donated car. This must be specified in the written acknowledgment which you should obtain from the charity organization of your choice. In your selection of the charity organization, you have to be absolutely sure that it’s a qualified organization. Look at the Cumulative List of Organizations in IRS Publication 78 to verify that your selected organization is qualified. Sometimes, you may have selected a charity organization which does not accept a car donation. What can you do? In this case, you will have to find a company which accept and sell donated cars. After the car is sold, the company will keep a portion of the proceeds and donate the remaining portion to the charity of your choice. Other than your car, you may also donate your motorcycle, RV, truck, boat or airplane.
Find out How to Start a Car Donation Program of Your Own!
If you are interested in starting your very own car donation program, you will be glad to know that it’s not such a complicated process. First of all, you have to know what paperwork needs to be done. Then, you need to decide the best manner to handle the donation program. Can you handle the program on your own? Do you know what to do when somebody donates a vehicle to your program? Well, it’s not too hard to learn but it requires time and effort. Another alternative is to engage a third-party liquidator to handle the donation process for a share of the selling price. You should always have the Blue Book on hand so you can check to see if a vehicle is worth accepting. To prevent tax deduction abuse related to car donations, the IRS has set up new tax rules. Always keep updated on these changes. Another thing to consider is the cost of taking in the vehicle. Study all the costs so you know if it’s viable to accept and process the donation. Some of the costs include transportation, fuel, and storage. Also take into account the time cost and the marketing cost. If you are looking to give the donated to a low-income family, make sure that it can be of service for a reasonable period of time.