Tag Archives: car donation

Car Donation – A Way To Get Tax Deduction

A car donation program is a way to get rid of old cars from the garage which eventually earns a tax deduction option. Donating the car is therefore a great way to save some cash for the car that you no longer use, not to mention, you are participating in a worthy cause.

As long as the car has four fully inflated tires, the towing company, appointed by the charity, will take it away. Larger non-governmental organizations and charities also take vehicles, which are not even in working order and sell its spare parts and scrap metal rather than selling the useless car. The smaller organizations however do not have the space and time to accommodate this; therefore they do not take if the car is in a really bad condition.

Taxpayers are permitted to subtract car expenses if the car is truly used for charitable purpose. The procedure is an itemized deduction. If you want to apply for the tax donation option, you need to collect and fill out the 503-c3 donation form.

You can get it from the charity you are donating the car to. You must have a good idea about the car’s actual value to estimate correctly before filling out the form. After that, the non-profit organizations or charities will take your car and sell it.

These organizations then use the fund to carry out the good work they usually do. Once they sell the car, they will let you know the price. Then, you can ask for the desirable tax deduction scheme from the authority by mentioning how much you have contributed to the society.

This entry was posted on Wed

A Different Perspective On Car Donation

Car Donation is very popular because it is giving while getting something in return. A charity receives the car, sells it, and uses the profit to fund a cause, and getting something in return due to the tax breaks a donor gets.

What The Charity Does

A lot of people wonder how charities use the donated vehicles. Actually most charities, like the American Red Cross has their own used car lots. Others auction the automobiles to the highest bidder and then some simply use the cars in carrying out their mission.

To Use Or Not To Use

No, charitable institutions do not simply toss coins to decide whether an appropriated car should be utilized for implementing programs or sold at a certain price or to the highest bidder. What they do is classify the vehicles into certain programs that it may be of great advantage to.

Let’s take for example Charity O: Charity O has 5 programs, the first: meals on wheels, second: aiding people gain employment, and third: an educational fund. The first thing a charity does is to evaluate the running and physical condition of a Car. If it still works well then they can maybe use at a delivery car, or lease it to a person needing a vehicle to work or school.

Charity Preparation

Most charities, especially those listed on the IRS publication 78 depends solely on car donations and other contributions in order to perform good will, hence they make it easy for people to donate their vehicles. The institutions always have IRS forms on file together with their donation forms.

Furthermore, it is also the philanthropic organization’s duty to provide the documents needed for the donor to claim tax deduction. These documents depend on how the car donation was put into use. If the car was assigned to an agenda, the charity will give you a tax voucher that clearly states the value of the car. The tax write off will be based on the car’s fair value that may be found on the Kelly blue book price listing of automobiles fair market values.

The charity also has to provide a paper acknowledging your appropriation. The instrument has to contain the details of the benefaction like, an honest estimate of the cost of your car, an assertion that the charity did not repay you anything in any manner or that if they did do something the deed consisted of intangible things like religious counsel or etc. All these have to reach you within 30 days of donation or else you cannot claim the tax subtraction.

Why Wait Donate!

There are those who hesitate when it comes to donating a car. After all, a car donation entails certain responsibilities like proper documentation and what not. But the important thing here is that you are helping someone while making it worthwhile for you because you reap not only financial benefits but spiritual and emotional as well.

A word to the wise, now that you have a glimpse of what a charity goes through to raise funds and even accept car donations, try and make it worth their while. If you can, deliver your car donation. This act helps a charity save a small yet significant amount of money by not having to pay a tow truck or driver to pick up your car. Not only that, you may also establish a long lasting relationship with the charity workers and you might even become one someday.

Car Donation – Two Options

Car donation is a non-cash charitable contribution. You will have two options during donating your car. You can give the car to a standard charity, which will later sell your car and will use the money to run their services. The other option is, you can donate the car to such a charity, which will use the car for their operations.

The second option gives you more value than the first one. To qualify for the tax deduction after donating a car, your entire deductions would have to be superior to the standard deduction.

Assume that you donated your car to a charity that has 501(c) (3) tax-exempt status. The charities usually sell far less than the market value. After selling your car (that has a market value of $1000), it will provide you a receipt that indicates the sells figure. Suppose they sold the car for $400. If you are in the 33% tax bracket, you are allowed to deduct $132 from your taxes. It means your $1,000 car gave you a $132 tax cut; only this much is your personal gain.

If you donate the car to a charity that will use it as part of its stated cause, it will allow you to ask 33% tax cut from the actual market value ($1000); meaning, $330 in your pocket. Clearly, the second option is giving you more cash back.

Donating a car to a charity has multiple benefits. It is a way to get rid of old cars from the garage which eventually earns a tax deduction option; not to mention; you are participating in a worthy cause.