Charity Car Donations

So you've finally gotten that new or used car that you've been wanting (or needing). But now what are you going to do with that old car that it replaced? One answer you may not have considered is a charity car donation.

There are advantages in it for you, too - it's not ALL charity:

Basically, there's three advantages for you as a car donor: You will probably qualify for a tax deduction, you will be getting your unsightly clunker off of your property and off of the street, and you will get that good feeling that you get from doing something good. We'll cover each one below:

Tax Deduction For Car Donation To Charity

How much of a deduction? Depends on several factors such as how much the Kelly Blue Book value is, for cars worth less than $5000. If your car donation is worth over five grand, you have to get an independent appraisal. But let's face it, 99% of us would never donate a car worth that much!

There's a few things you should know before you get tax deduction dollar signs in your eyes.

- You have to make the donation in the tax year for which you claim it.

- The charity must be a bona fide charity; it must be eligible to receive tax deductible contributions. (Request a copy of their tax exempt status.)

- Get a receipt, of course, for your donation from the charity.

- If your gift is worth over $500, you have to complete IRS Form 8283 and attach it to your tax return.

- Regardless of its worth, you must get a written acknowledgement from the charity concerning exactly what it does with your car and how much it sold it for (if it is sold). And you must get this documentation within 30 days of your donation. But this info would include whether or not the charity intends to just use your car or if they are planning on improving it and then using it or improving it and selling it... which in this case they'd be required to give you documenation of how much they sold it for.

The following RSS feed from Auto News gives you an idea of new car pricing, which will help you determine how much an older car would be priced at.  In any case, you could look up the Kelly Blue Book Value.

- Your deduction normally limited to $500, except in the case that the charity sold it for more. But keep in mind that your tax deduction is taken off of your taxable income - not your tax bill! Which often means that you owe just as much (unless you donate a car with higher value).

The second advantage to a charity car donation is that you get that unsightly old junk heap out of your front yard, driveway, or street in front of your house. Even if it isn't necessarily a "junk heap," it frees up room for your new car. And if it IS an old clunker, you will have just improved your neighborhood!

And last, but certainly NOT least, you will get that good feeling of having done something good! Because there are people out there who truly do need your car. Not everyone who gets charitable donations are lazy, welfare-sucking leaches. There are many people who just have been victims of bad luck, bad health, crime, etc. Remember that many of us are only a paycheck or two from being in the same boat with them.

So go ahead and donate your old car to charity and get three things done at once. It's often easier than finding a buyer or worse - having to fix it up and then find a buyer. (What a pain.) Save yourself time and trouble while doing something good for a change!