Tax Benefits: Why Should You Consider Donating Your Used Car

There are multiple benefits of donating your car to you as an individual and to Charity. It is a way of supporting a Worthy Cause that helps needy people. There are many charity organizations where you can donate your old car, and most charities accept most used cars and arrange for pick up.

Donating your car to charity can result in significant Tax Savings if you include it in your charitable contribution deduction. In this article we evaluates a list of important tips and Options for a successful car donation.

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Have you heard about Car Donations but do not know how to go about it? You may have come across different appealing ads asking you to donate your used car to charity. Most charities accept most used cars and arrange for pick up. They may sell it in whole, in parts, or use it in their charity.(1)

There are multiple benefits of donating your car to you as an individual and to charity. Firstly, it is a way of supporting a worthy cause that helps needy people. You probably know several charity organizations. What do they do? Would you like to help them further their mission? Donate your car there.

Secondly, it will help reduce your stress. If you are wondering how to advertise the car, handle emails and phone calls, you are better off donating your car. You will not need to advertise, sell, keep showing the car to potential buyers or dealing with them. The charity will organize for its pick up and you will be a happy person.

Thirdly, donating your used car will help you get rid of a car that you don't want. If you are unable to find the car's title, some charities may accept it without the title. They may not be able to sell it to someone, but they can sell it for its parts, which is still a good thing. If you have a car that you no longer want to keep, donating it goes a long way to help needy people in charities.

Last but not least, you will get tax breaks by donating your car. Depending on your car's value, you will qualify for a tax deduction. (2).

According to Carsplan, there are three prominent charities where you can donate your car directly. These are:

• Habitat for Humanity
• National Kidney Foundation
• American Cancer Society

Tips for Car Donation

There are many charity organizations where you can donate your old car. As you consider donating it to the above or any other car donation charity, you will find the tips below helpful.

Eligibility of the Organization

With all the available charity organizations, it is possible to get scammed along the process. That is why you need to look for relevant information about the organization you are considering. Find out how the company works and its previous work records. Ensure the organization is eligible and they will use your car in a meaningful way. Consider reviewing their financial situations, charitable programs, and state registrations. The organization should be registered with IRS. (3).

Talk to the Charity Agents Directly

For security reasons, it is recommended that you talk to the organization's agents directly. As a donor, IRS requires that you know the kind of fundraiser society you select. As you talk to them, ask how they will use your car. Will they sell it or use it to run the organization's errands?.

Paper Trail

It is important and necessary to keep a paper trail. Should any tax disputes arise in the process, having the right documents and receipts will help you solve them easily.

Consider an organization that will use the Car instead of Selling it

When you donate your car, the charity organization may decide to sell it or use it. If you donate it to an organization that will use it and not sell it, you will get a better tax deduction. Why? Because it will not be calculated based on its selling price. Instead, it will be calculated according to its fair market value.

If Possible, Avoid Third Parties

It is easier to donate your car to a charity organization directly. Third parties may have to incur towing and storage costs. If it is not possible to avoid the third party, ensure that the organization gets a good percentage of what the car is sold for.

Final Thoughts Donating your car is a nice way of helping charity organizations achieve their goals and further their missions. It helps you get rid of an old or unwanted car in a good way. Charities can accept the car you deem useless, sell its scrap, and appreciate your gesture. Donate today and see the difference!