Owning a car that is old and beaten down can quickly burn a hole in your pocket. If you have a car that is not in driving condition or requires expensive repairs, it may be very difficult to sell. If you want to replace your clunker, sometimes the most affordable option is to donate it to charity. In this article, we’ll present the benefits of donating your car and how you can make some money in the process.
Benefits of Donating Your Car
- By donating your car to charity, you know that you are helping out someone less fortunate than yourself.
- You can deduct the donated amount from your taxes.
- You can donate your care regardless of its condition.
- You don’t have to cover the cost of transportation when you donate your car. [1]
- By donating your car, you’ll have more free living space.
Steps of the Donation Process
First, you have to choose which charity you want to donate your car to. After you have chosen the charity, contact them online or by phone. The charity will then make arrangements to pick up your car. Charities can sell cars at auctions or give it to their beneficiaries. The amount of your tax deduction will depend on what the charity decides to do with your car.
Claiming Your Tax Deduction
There are four easy steps you need to follow to get a tax deduction based on the amount of your donation:
1. Make sure you are donating your car to a qualified charity. You can find out if a charity is qualified by checking their website or visiting the IRS list of exempt organizations. [2]
2. You will need to ask the charity for a receipt that you can use in your tax deduction claim.
3. If your donation amount is under $500, you can claim a tax deduction for the car’s fair market value price. This means you will get up to $500 deducted from your taxes.
4. If the donation amount exceeds $500, you are entitled to a deduction that equals the amount of money your car was sold for. This means that if your car sells for $800, you can write off $800 from your taxes.
5. IF the charity you donated to decides not to sell your car, you can deduct the car’s fair market value from your taxes. Sometimes charities give donated cars to their staff members, volunteers or beneficiaries.
Charities You Can Donate Your Car to
You can donate your car to the charity of your choice, but if you want a tax deduction it’s wise to keep these things in mind. Make sure your car is going to someone that really needs it by choosing the right type of charity. Make sure the charity of your choice has a good reputation. You should do extensive research online to make sure nobody takes advantage of your donation. Some of the best charities to donate to are those that support struggling families, domestic violence victims, or war veterans. Regardless of your decision, you can have the satisfaction of knowing you helped someone in need.
2. https://www.cbsnews.com/news/how-to-collect-tax-savings-from-donating-a-car/