One great way to get rid of an unused vehicle and get a tax deduction is to donate it. As a bonus, you’ll be contributing to your community as well. There are many organizations that will take your car, no matter its condition. They make it so easy, it’s a very good alternative to selling or junking your car.
The Tax Deduction
One benefit of giving your vehicle to charity is the tax write-off you receive. IRS rules stipulate that you determine the fair market value of your car, and when you donate you can claim the fair market value up to $500. Some recipients also allow you to claim the amount for which the charity sells the vehicle. This means that you won’t be losing money; you simply defer receiving its worth until tax time.
Your gift can go to one of many organizations that can use extra funding, from the , which raises money for public radio and TV stations, to Wheels For Wishes, which raises money for the Make-A-Wish Foundation. The Purple Heart Foundation, Kars4kids, local shelters, Goodwill, and many other deserving groups also take vehicle donations (even RVs, motorcycles, and boats). These charities use drivable cars for transport, or receive money from selling the car. Non-working cars can be stripped down for parts, which can be sold for reusing or recycling. This means that you’re helping others, and still getting the full value of your car. You’re even helping the environment, as up to 95 percent of a car is recyclable.
How To Donate
Companies like Wheels for Wishes and Kars 4 Kids, which are 501(c)(3) class organizations, make donating a simple process. There’s no cost for towing or removal. You get the maximum possible charitable donation, and it doesn’t take much time. Normally, the process involves a phone call, filling out a donation form, and arranging for pickup. Often, you don’t even have to be there for pickup. You will probably need the car’s title deed to transfer ownership to the charity; if you don’t have it, there may be additional paperwork. Then, you get a receipt, which you can deduct at tax time at the end of the year as long as you itemize your deductions. Donate by midnight on January 1 to count your donation for the previous tax year.
Clear your driveway and help populations in need! Donating your car is an often quick and painless process that can help you do good in the world, recoup your financial loss through a tax deduction, and get rid of your clunker in a responsible and environmentally-friendly way.