Car Donations: Tax Deductions

Car Donations & Tax Deductions

There are a few considerations to make before you pick up the phone and call you favorite charity asking them to  come  pick up your vehicle, boat, or RV. Sounds like a good idea right? Make a car donation, get a tax deduction. Sure saves the hassle and expense of advertising, then haggling with a buyer, or arguing with some salesperson in a used car lot. Not to mention the mountains of paperwork required by the Motor Vehicle Department.   However; and on the bright side, when you do make a car donation to a charitable organization most of them handle all the necessary paperwork, plus send you confirmation for you tax records regarding how much they received for old Nelly.

First and foremost you want to check and see if the organization you are about to turn over your prized possession to, is legitimate. That in itself is easy enough, all you have to do is check the IRS website and see if the charity is listed. You also want to be sure that it is a, “not for profit charity with a tax exempt status,” moreover that all the money generated from the sale of your vehicle, ends up your charities hands, and not in hands of some large corporation. How can that be? The majority of the advertisements you see that play to your emotions showing a child in a country half way around the world that hasn’t eaten in six months,  are not charities at all. They are in business like any other corporation, to make money. Do they give part of what they get for your donation to charity? Yes they do, but the percentage is low, very low, usually only from 2 to 10 percent. On the other hand, when you donate to a legitimate charity directly, unless they have to pay for repairs (And you should be donating something that is ready to sell, and not donating it because you don’t want a repair bill.) before they can sell your donation, they get to keep it all, or at least the majority of it, in case of the latter. So call you favorite charity directly, and ask them if they have a car donation program. If they do they will steer you in the right direction. “I for one.”  If  my charity were only to receive 10 percent of what I was donating, and some corporation was going to profit with the rest; would much rather make a cash donation directly to the charity. And then go through the hassle of selling the vehicle myself. But that’s just me.

You also may want to decide if making the donation in the first place, is the right financial decision for you. Check with you account, or attorney, they can definitely give you the right advice. How much of a deduction you can claim depends on, how much the charity receives when they actually sell your donation. And; (yep there’s an and) what tax bracket you fall into. Your tax professional can advise you about things like delaying certain payments until the following tax year in order to lower your taxable income for a given year, (or vice versa) or to get the most advantage from your car donation tax deduction, but it all comes down to the bottom line, whatever your tax bracket is,  will affect the dollar amount you recoup by making a car donation. Just be sure to check with you tax advisor, or account to see what’s best for you.

As an investigative freelance writer, I am currently doing research for a series of articles titled, Not So Charitable Organizations. When the series is completed, and after they have been published, I will post them here for all to read. You may be shocked at what I’ve discovered. I know I am

And always remember.

The best part of not being perfect, is simply the joy that it brings to others.

© J. Francis 06/23/2009