Scenario: It’s got four wheels and an engine. Sometimes it even runs. But the mechanic’s estimate is more than you want to pay, so it’s time to get rid of the old clunker in your driveway. A 501(c)(3) public charity you like will take it off your hands. You’ll dispose of your car, support a favorite charity, and get a nice income-tax deduction. It’s a win-win-win situation—right?
In this case, yes. But vehicle donations to charity don’t always work out that way. To clarify the situation, the IRS issued a publication for donors on the topic, which Car Donation Wizard recommends checking out to decide if you’re ready to donate a car.
“A Donor’s Guide to Car Donations” (IRS Publication 4303) offers the following advice to vehicle donors:
- “Check out the charity”
Only gifts to qualified nonprofits are deductible. If you plan to deduct your vehicle donation from your taxes, you need to verify that the nonprofit receiving the car is a qualified organization before you turn over the keys and title.Note: If you find a nonprofit on GuideStar, it’s likely that your gift to it will be deductible. To be sure, look at the fine print that appears under the organization’s EIN on the first page of its GuideStar Report. If it is a 501(c)(3) public charity, your donation will be deductible. If the nonprofit is exempt under another subsection of the tax code—for example, a 501(c)(4) organization or 501(c)(6) entity—contact the organization to ask about the deductibility of your gift.
- “See if you’ll get a tax benefit”
You can deduct charitable contributions from your taxes only if you itemize your deductions, consult your tax adviser for individual information on how this will benefit you most.
- “Check the value of your car”
A car’s blue book value is not necessarily the same as its fair market value—a vehicle missing a bumper or driven for thousands of miles without an oil change will have a lower fair market value than a car that is the same age and model and has been well cared for. Only the fair market value of the vehicle you donate can be deducted from your taxes.
- “See what your responsibilities are as a donor to charity”
Make sure you obtain all necessary receipts and, if you declare your car’s value as more than $5,000, that you have a written assessment for it.
See Publication 4303 on the IRS’s website for more information.
Read more on Guidestar.org
Arm yourself with the knowledge you need to fulfill a scenario where you and the charity both win. Trusting your donation with one of Car Donation Wizards incredible nonprofit partners ensures that your donation will be handled professionally, efficiently and with the utmost concern for raising the most money for your charity. We work with recognized 501(3)(c) registered organizations, who run transparent organizations, so you know how and where your money is being spent. Rest assured that every car donation made through Car Donation Wizard will be eligible for a tax deduction. Get started with one of our vehicle donation experts online or over the phone today at 877-957-2277.