3 Tips if You’re Donating Your Car
Donating your used car to charity is an excellent way to give back to your community. An AOL poll found that roughly one out of every 10 families in the nation does not own their own car. Combine that figure with the recent 2014 study by the Urban Institute that found car owners to be twice as likely as transit users to find jobs and four times as likely to retain them, a car donation seems like a great way to help those in your community.
Unfortunately, the car donation process can get a little tricky when it comes to choosing the right charity, calculating your tax deduction, and avoiding the scammers looking to take advantage of your altruistic gift. Avoid letting your benevolent bubble burst and get the biggest benefit and deduction possible with these simple tips to donating your car to charity.
Know Your Car’s Value
As opposed to previous years, the IRS now prohibits donors to write off the blue book value of the automobile for a tax deduction and instead uses the fair market value (typically the amount the charity sells your vehicle for).
Avoid Scams
Aside from finding a charity that will accept your donation directly (never use a third party) and use your car how you desire, you’ll also need to make sure your choice is an accredited 501(c)(3) organization in order to receive your tax deduction. Always check the organization’s website, but it’s a good idea to check out its status and reputation on the Better Business Bureau’s nonprofit list or Charity Navigator.
Do the Paperwork
Don’t be another statistic where a nontransferred title makes you liable for future accidents. Check with your local DMV for details on properly transferring a title and releasing liability, and make sure to read through the IRS requirements for donating your car. And keep a paper trail of all the paperwork (receipts, 8283 form, title change, etc.) for at least one year.
© 2014 Texas Farm Bureau Insurance
