We see tragedies all around us every day. Natural disasters and acts of terrorism flood our televisions and social media feeds with images of those suffering. We’re left to ask one thing. What can we do to help?
While volunteering is always helpful, many charities and relief organizations repeat the same mantra every time there is a need: donate money. Everything they do requires money, whether it’s providing staff for search and rescue, materials for rebuilding, or just the basic necessities people require to live.
Of course many of us don’t have the resources necessary to make a monetary donation. What we may have, however, is a car that we either don’t need or that we’re going to replace. One option that is gaining popularity is to donate that car to a charity. Here are some things you may need to know before donating your car to charity.
Can you donate directly to the charity?
Many charities have the infrastructure to accept donations of automobiles. Others would need to involve third parties to pick up the vehicles, assess the value, and sell the car. All of these third parties end up taking away from the amount of the donation the charity receives. Finding a charity that has already set up system to address these issues ensures your donation will make as much difference as it can.
It’s your responsibility to deal with the IRS.
Though it’s not the reason we donate, one of the benefits is the tax deduction that donating to a charity will allow you. In order to claim this deduction, however, there are few things you need to know.
First, it’s up to you to get everything in order. You will be the one assigning value to the vehicle when declaring the deduction so you will need to be able to back up your claim. If you’ve done recent repairs or any custom work, have the receipts handy so you can present them if necessary.
Second, depending on how much the car is worth, the charity will need to fill out certain forms for you. If the car is worth more than $500, they will need to fill out section A of form 8283. If it’s worth more than $5000, they’ll need to fill out section B as well.
Finally, and most obviously, get a receipt. It seems simple, but this is the most basic thing that would be needed and the easiest to lose.
There may be a simpler way
Of course non-cash donations are a big trigger to the IRS for audits. If all of this sounds too complicated or risky, there is another way. You could sell the car yourself and donate the proceeds. While selling a car used to be a scary prospect involving the expense of classified ads and potential liability, the landscape is a lot clearer now. There are numerous sites that allow you to list your car for free and will reach many more people.
Whether your car gets sold to help pay for assistance or is fixed up and given to a family in need, donating your car is a simple way to help out and feel like you’re making a difference.