Want to donate a car to charity? If you have a junker, it’s probably not going to give you much of a tax deduction. On the other hand, if you have car that can be used by the charity, the donation could be significant.
If you have a car in decent working condition, by donating it you will:1. Help a charity whose work you believe in: Maybe that seems obvious (most of us make donations to charities whose work we support), but it’s true. With Giving Center, you’ll believe in our mission. To help improve the lives of the less fortunate. Giving Center assists in housing, education, medical assistance, immediate transportation needs, computers, and animal welfare.2. Provide a vehicle for Giving Center to use: As long as your car is usable, Giving Center can make good use of it: delivering meals to the elderly, taking people to doctors, or anything else that furthers their mission. 3. Get a healthy tax write-off: The rules are strict since the law changed in 2004, and the process more complicated, but a deduction approaching fair market value can still be had. If you donate a car valued over $500, and the charity sells it, you must get a written notice from the charity stating that it was “sold in an arm’s length transaction between unrelated parties” and the gross proceeds of the sale. If the car is going to be used by the charity in its programs, then you will get written certification of its intended use and planned time of use. The charity must not sell or exchange the vehicle before the planned time of intended use. If the car is worth more than $5,000, you must also get an independent appraisal stating so. If the car is worth more than $500, you will need to file IRS Form 8283 and attach to your return. If the car is worth more than $5,000, in addition to Form 8283, it might be a good idea to include the independent appraisal and the charity’s certification with your return as well.4. Avoid the hassles of selling the car yourself: You won’t need to pay for newspaper ads. Nor will you deal with phone calls or emails—or have to show the car to potential buyers and haggle over the sales price.5. Free pick-up:Giving Center will collect and tow your charitable donation away for free. They will work with you to schedule a pickup! They offer FREE pickup of your donated items across the United States. 6. Get rid of a car that does not have proper title: Some charities will take a car for which you cannot find the title. They probably will only be able to sell it for scrap or parts, reducing the value of your deduction, but at least you can get it out of your driveway and can avoid the expense of replacing that title.
THE BOTTOM LINE
Non-cash donations are a common trigger for IRS audits. So, after you make your generous contribution, make sure you carefully document the transaction and keep the documents in your IRS tax file for that year in case your accountant or tax preparer needs it. Also familiarize yourself with the IRS’ publication “A Donor’s Guide to Vehicle Donation.” That way you can be sure you are following all the rules.You can check the list of approved 501(c)3 organizations like Giving Center at this IRS website.
Donating a car to charity can be a win-win for you and the Giving Center, provided the donation meets the provisions. Remember, the most beneficial donation involves a car that can be used by the charity or—if transportation for the underprivileged is part of the charity’s mission—sold directly to a person who will drive it:Only then (and with the proper documentation) can you take a figure near the car’s blue book value.