Oftentimes, vehicle owners outgrow their vehicles. When this happens, if the car owner does not want to go through the hassle of selling the vehicle, and has no one to gift the car to, he or she may be left wondering about other options. Vehicle donation in is a great way to get rid of an unwanted car, while also benefitting an organization or someone else in need. Continue below to read more information about vehicle donation and the related benefits.
A few years ago, it was a walk in the park to donate your vehicle to a charity and to receive tax benefits. However, since the IRS found that greedy taxpayers were claiming more than their vehicles were worth, the process has become more difficult. Nevertheless, even with the added paperwork and the tightened rules on compensation amounts, vehicle donations are still a good way to make some extra cash.
Most large and established charities will have IRS-approved paperwork ready to go when it comes to processing your vehicle donation. Plus, make sure the organization process a receipt for you to ensure you can include the information in your next tax return.
An important recent change to be aware of when it comes to the rules around vehicle donation is the $500 threshold. This means that any vehicle donated which has a market value of more than $500 entails a more complicated process when claiming back the tax. So, bear this in mind when having your car valued (which the car owner, not the charity, is obligated to carry out).
If receiving a tax benefit isn’t of interest to you, some charities offer vacation vouchers in exchange for vehicle donation. The benefit of this is that the whole family can gain from your charitable giving, and you’ve helped a good cause at the same time.
Do keep in mind, however, that vacation vouchers received in exchange for your vehicle donation will also need to be itemized as part of your tax return. So, be sure to check out whether any third parties are offering these vouchers on behalf of the charity. If they are, make sure you look into how this works and that they are legit. That way, you don’t get any nasty surprise letters from the IRS further down the line.
Many charitable organizations offer to pick up your vehicle donation free-of-charge or at a reduced rate as a thank you for your donation. This means that even if you are having your car picked up for scrap, it could work out to be cheaper for you.
Some charities may use donated vehicles to haul goods, while others will simply dispose of them. It is therefore beneficial to the environment to have the charity take care of this, because organizers can dispose of it safely and responsibly; recycling any elements that are eligible. So, even if your vehicle is totally unusable, a charity may still be able to benefit from its value, as well as contributing to a greener world.
The Gift of Space
If you’ve had that old truck sit on the driveway taking up space for the last few months, do yourself a favor and give it to good cause locally. Now you no longer have to look at that eyesore and can use the space for something much more useful.
Save on the Hassle of Keeping it Roadworthy
Just because you aren’t driving your broken-down old heap, in the eyes of the law, you still need to keep your car insured and registered. What about maintaining it with servicing and repairs? It makes much more financial sense to run a car that doesn’t require excessive upkeep. It seems sensible to use your money to make the lives of others better rather than ushing it down the toilet.
The Feel-Good Factor
We all know that helping others gives us that warm and fuzzy feeling inside. Even taking a bag of old clothes to a thrift store can give you a good feeling when you read up on what the charity does with its donations. Now, imagine the benefits you can bring by giving something as substantial as a car.
Rather than choosing a charity at random, consider which cause is most important to you, and use this to inform your decision about where to put your donation. Maybe it’s employment for people with disabilities, animal welfare or reducing homelessness. Now do your research to insure you are aligning yourself with an organization that accepts tax-deductible donations. You can also find out a lot about what a charity does with its donated money by looking online. That way, you can fully understand what difference your money makes.
Other Ways to Give
It’s clear that there are both headaches and perks when it comes to donating your car to a charity as a gift. But if you’re put off by the thought of the extra work, don’t worry; there are other options. For instance, you might find that selling your car privately and then donating the money from the sale directly to your chosen charity is more straightforward for you, and ultimately means more money gets to the charity’s beneficiaries quicker and more efficiently.