Do you have a vehicle or car that you want to get rid of but don’t have the time to make the necessary arrangements? Do you want to buy a new car but you can’t because your old car is eating up all the parking space? Do you want to bring your old, dilapidated car to the junk shop but don’t have the money to pay for the tow truck? Do you often feel that you want to help someone in need but don’t know how to? If you do then donating a car to your favorite charitable institution is just the thing that you need. It costs you absolutely nothing but yet you reap the rewards.
Donating a car to a legitimate charitable institution offers many rewards for you and your car. Instead of just gathering dust in your garage or awaiting its final farewell to this world, your car may serve a noble purpose by being an instrument to help others in need either through its sales proceed or as a vehicle for those persons or charities in need. Other than that, you save yourself a lot of time, energy, and money in getting rid of the car either by selling it, trading it or getting it to the junkshop. You see when you donate a car you get a tax deductible from the proceeds of the donation. These means that when the car is sold or used by the charitable institution, you get to save money from paying taxes as market value of the car can be deducted in the final tax that you have to pay. This means that even if you don’t do anything, you are actually saving money from taxes. More often than not, the taxes that you save cost more than what you would get if you traded the car or sold it. Another good thing about donating cars is that charitable institutions accept all kinds of cars, even those that are not running and yes, they are tax deductible too.
Rather than sell the car which entails you to repair the car, advertise and entertain potential buyers that would eat up your time, donating your old car is the way to go. Of course, at the end of the day you also get the nice feeling inside that you did something special and helped someone who needed help.
If you are interested in donating your car but just don’t know how the procedure goes, then you’re in luck as I’m also here to tell what to generally expect when you are donating a car. The first thing that you have to do is to decide which charity you want to donate it too. Be sure that the charity is legitimate by checking it with the Better Business Bureau. It is also good if you can make sure that the charity gets 100% or nearly 100% of the proceeds of the car, as some companies use charities to earn profits and the charity actually gets about only 10% of the sales of the car. Do your diligent research on the charity and then donate your car. Your chosen charity actually gives you instructions on what to do. But generally, you have to call the charity and inform them of your desire to donate your car. You would need to fill out some application and send them the title of the car. After that, the charity would call to schedule the arrival of the tow truck to get the car. Depending on the charity, you can expect a tax receipt in a few months but some charities send them sooner. Depending on the situation, you can either use the fair market value of your car as stated in the receipt as a tax deductible or use guidebooks in computing the fair market value of your car. Either way you get to deduct this value in the taxes you have to pay.
When making an auto donation, whether a car, truck or RV, may not actually be in your best financial interest when straight economics are concerned. Of course, charitable giving is it’s own reward for many, but if you actually consult your accountant, you may not enjoy any additional incentive in the form of tax deduction, as is typically offered for most auto donations. Especially if your auto donation is worth more than $5,000, you should consider your actual benefit to accurately judge whether it’s wise to donate your vehicle.
Comment by Thomas Zoellner — June 15, 2008 @ 2:06 pm