Auto donation is a noble deed, which also benefits you substantially. The tax deductions that you get for auto donation are obviously more than the price that you get for an exchange program or from a used car dealer. Similarly, auto donation saves you additional repair costs as well as time needed to find a prospective buyer for the car if you are planning to sell it off. Hence auto donation is a good option if you are looking to dispose off your old car. However, there are certain things you should not do when you are going for auto donation.
Finding An Auto Donation Charity
The first thing to note is that auto donation to a non-qualified charity will not get you tax deductions. You need to check the IRS guidelines and listing to find out more about qualified charity groups in your city or state. When you go for auto donation, you should ensure you do not donate a vehicle that is not in a drivable condition. Towing such a vehicle and then trying to repair it will only cost more for the charity. In fact, some people have inflated the prices of such cars while claiming deductions for auto donation, even though the charity has lost money due to the auto donation. This is ethically incorrect. It is also better to refrain from requesting for free pickup for auto donation unless you do not have any other choice.
Market Value of Your Auto Donation
Another thing a lot of people practice but should be avoided is inflating the fair market value of the car to claim tax deductions for auto donation. This is ethically incorrect and also you might be asked by IRS to show the process of arriving at the estimated cost. When you do auto donation, it is a good idea to check with a charity to find out what it plans to do with the donated vehicles. Sometimes your auto donation could ensure that a needy family gets a car. Sometimes, the vehicle is auctioned off. If you are doing auto donation, purely to cut down on your taxes, then make sure you donate your car to a charity that has expertise. Such an organization sells the car at the best possible price, be it to salvage dealers or at wholesale auction centers to get you maximum deductions for auto donation.