If you have an old vehicle you’ve been looking to get rid of, consider making a charity car donation rather than going through the process of selling it. While you won’t get any money directly from the transaction but you could receive a hefty deduction on your taxes for the donation. This can save you big money when it’s time to pay the IRS, but it’s only going to pay off if you go through the steps properly.
There are plenty of car donation programs that are set up just to rip people off and sell their vehicles for a profit. They take the donations of unsuspecting victims and sell them off, giving a small amount of the money to the named charity while keeping the bulk of the profits for themselves. Research the organization carefully to ensure that your contribution is doing the most good.
Verify Your Car is Being Used Well
You don’t want to give your car away to a scam artist, so make sure you take the time to check that the charity is doing good things with your donation. Ask the following questions before donating to find out more about the whole operation and whether you can trust the business or not.
- How much of the proceeds from your donation go to the organization?
- Who’s handling the selling, and how much does that person receive in proceeds?
- Will the charity sell the vehicle or keep it for use by the organization?
Double Check That You’re Working with the Right Charity
There are many different charities with similar names. It’s easy enough to donate your vehicle to the Salvation Armie, instead of the Salvation Army if you aren’t paying attention. Always verify you are working with the organization that you want to be working with and that they are a legal charity. Otherwise, you could lose the vehicle without getting that beneficial tax write off.
If you aren’t sure about the company after doing a bit of digging, you can often find out more by contacting organizations like Charity Navigator. Organizations like this one investigate and report on the operations of non-profits worldwide. This further investigation will help you avoid making a serious mistake.
Make Sure You Claim the Deduction
Claiming a vehicle donation is no longer as simple as it once was. Now you have to fill out a complex form that helps figure out a more accurate value for the vehicle, and leaves less to guesswork. Download IRS Publication 4303 to determine how to donate your vehicle successfully and obtain the right deduction for your taxes. Make sure you take the time to deduct the vehicle from your taxes properly so you get the full benefit from your donation.
It’s really easy to waste a vehicle donation if you aren’t careful. You could end up giving it to a non-registered charity and find yourself ineligible to receive that deduction. You could give the vehicle to a charity that doesn’t make good use of it, which would be a pretty serious waste over giving it to another organization that’s doing good with their vehicles. Make sure you research well what different groups are doing, and only rely on the ones that are going to give you excellent value for your money. All the others should be avoided because they are not worth your time or your vehicle.