How to Donate Your Car to Charity

If you plan on donating your car to charity, make sure you do the necessary research first. Begin by selecting a non-profit organization to receive your vehicle. Double-check that the organization is a 501(c)(3) to ensure you do not accidentally donate to a for-profit organization disguising itself as a charity. Then, double-check that you are donating directly to the charity, and not an organization that operates as a middleman. This reduces profits both for the charity and for you. Therefore, contact the non-profit about car donations directly to minimize the chances of using a middleman or donating to a for-profit organization.

Once you have found a suitable charity, prepare your car for donation. This means removing all personal items, vacuuming, and washing the vehicle. Additionally, prepare the vehicle’s title. If you do not transfer the car title in preparation for donation, the vehicle’s registration may remain unchanged even after it is sold. You may be held responsible for parking tickets, unpaid registration and other charges associated with the vehicle. If an organization tells you not to worry about a title or leave it blank, reconsider your donation.

You must fill out a vehicle title to properly make your donation. You may want to sit down with the organization to complete the car title transfer. Typically, you identify yourself as the seller, and the car donation charity as the buyer. Depending on the value of your car, you will also have to fill out IRS forms. For example, if your car is valued at more than $500, you should fill out and include Form 8283 Part A in your tax returns. If your car is valued at more than $5,000, you should fill out Part B of that form instead.

Before you donate your car, be sure to take pictures of the vehicle condition just in case you need to verify its value. Once you have submitted your car donation form and title paperwork, most car donation charities will pick the car up. This saves you the hassle of moving the car, particularly if it is a junk car. After the charity picks up your vehicle, wait for them to send you a tax-deductible receipt. This receipt tells you what size deduction you can take on your taxes.

The receipt may not be prepared until the car is sold at auction. The IRS car donation rules say that you must use the fair market value of the vehicle to determine your tax write-off if it is donated to be used. Additionally, you must use the profit amount for your tax write-off if your vehicle is donated to be sold. The receipt allows you to determine the value of your tax write-off, so you should make sure you receive one.

Last updated on Friday, February 28, 2020