Donating a vehicle to a charity or someone in need is a noble act and is appreciated as such. It is also a great way to stop paying taxes on a vehicle you barely use. No matter the type of charity you choose to donate a car to, you will have to keep a few guidelines in mind.
You will have to research how to find the best way to donate. Also, know the requirements of a charity based on the type of vehicles it accepts as donations. Here are some of the best ways to donate a vehicle:
Follow IRS Guidelines
There are a number of legal guidelines that you need to follow before you begin the process of donation. From choosing a charity to itemizing deductions, there are a number of conditions to pay attention to. The most important condition associated with donating vehicles is that the value of the donation should not be more than half of your gross income.
Choose a Reliable Charity
There are several non-profit organizations that will claim to accept your vehicle as a donation. However, not all of them are legitimate or reliable. Organizations like Habitat for Humanity are some of the most popular charities to donate a car to.
You cannot just donate to any charity organization. If you want the tax benefits, it is better to choose a charity that is included in the database of IRS's tax-exempt organizations. To ensure the reputability of the organization you are donating to, you can ask for their donation records to see how they make use of the money and the proceeds.
Adjust Expectations
Donating a car does not mean that an organization or charity will use your vehicle for their errands. Once a vehicle is donated, the charity is within its full rights to sell it and use the proceeds for the cause they stand for. You can check out the websites of different charities to see how they will be using the donated cars. While some of them are recycled or sent for salvaging, others are sold.
Complete Paperwork Accurately
Each charity has a policy in place which allows for the proper transfer of the title. You cannot be negligent in the transferring of the title. As long as the car is under your name, you will be legally responsible for all the expensive expenses related to it. The reputable charities will ask for the title to be transferred so that future sales can be made smoothly.
Another important piece of advice is to complete all the paperwork related to the donation of the vehicle. Keep the records with you both physically and digitally for future reference.
The Takeaway
If you want to donate a car, all you need to do is follow some simple steps. It is an excellent way to manage your taxes but is also significant philanthropic action. Choose a reputable charity and be careful with your paperwork to complete the donation quickly.
