Car charities accept all kinds of motorized vehicles: trucks, vans, RVs, boats, trailers, planes and motorcycles. Many charities claim they can't meet the demand for good used cars. So, these car charities need your help. Most car charities fund their programs by selling donated vehicles at auctions.
If you qualify, the tax deduction can also come in handy at the end of the year. To qualify you must be able to itemize your deductions on your tax return. Check with your accountant to see if you qualify. Make sure you get a receipt from the car charity. The receipt will include three things: the car's value, the charity's name and donation date. The receipt is essential, especially in the case of an IRS or state audit.
Unfortunately, you can't just take the Kelly Blue Book value for the car anymore. You have to wait until the charity sells your car. Then you can only deduct up to the amount of the sale. If you're just in it for the good feeling, the tax deduction is just a bonus anyway. But, not everyone can deduct their donated car. You have to be able to itemize your deductions.
Again, the amount of deduction is the value of the car up to $500 or the amount for which the car is sold, if above $500. So how is the value of your donated car determined? You can deduct the full market price if your chosen car charity uses the vehicle for its own purposes: deliveries, pickups, or passenger transportation. That means that under the new tax regulations you can only deduct the fair market value of the car if the charitable organization uses the car in direct connection with their car charity. You can find the fair market value for your vehicle in the official Kelly Blue Book.
Did you remember the car's title? Don't forget it! You'll need it at the time of donation. Some car charities can work around it, but many need the title in order to accept your donation. So as you're driving your car to the charity, remember these three items: the title, the keys, and the paperwork.
See it's simple. Giving your car to charity will save you time, headaches, maybe even give you a tax deduction. If you've been on the fence about donating your car, get off the fence and give a deserving charity a call.