A charity car is a vehicle that is given away by someone to a charitable organization. Charity car donations have become very popular all around the world especially because of the tax benefits. For example, in 2000 in the United States, more than 700,000 people donated their cars and their taxes were reduced by $654 million. Analysts claim that charity car donations have become a tax shelter for many people. Many organizations rely more and more on car donation revenue.
How to donate a car
Charity car donations help both organizations and yourself. Charity organizations auction the vehicles and raise funds to continue their activity while you get charity deductions for your yearly taxes. If you have a car that you don’t use any more and want to donate, here is how you can do it. First, locate a charity organization online, you that accepts donated cars. Make sure that the organization is legal so you can benefit from tax deductions.
Secondly, give the nonprofit organization a call and ask them if they accept your vehicle. If they accept it, schedule a meeting with the volunteers from the organization in order for them to pick up the vehicle. If the charity car is valued at 500 or more, you can take it off from the federal taxes. Make sure that the organization gives you a receipt for your donation. It’s best to clean up your car making it look presentable before the volunteers pick it up. Also, make sure that you have the title of the car. Finally, download the 8283 form (this is a non-cash donation form) from the IRS official website. Print it and keep it with the receipt from the organization. To claim your deduction, you will need to fill in the form and added to the federal taxes along with the receipt.
Benefits of charity car donations
There are a lot of organizations that run donation programs. Some of these organizations have car lots but generally the donated cars are sold at auto auctions. The auto action companies usually sell a charity car and give the money to a specific organization, after taking a small fee from the car’s value. There are nonprofit organizations that don’t have a professional staff or their own facilities to sell the cars they receive. On the other hand, if you are a donor you should check first the fee taken by the auto auction company for selling your car and see how much money goes to charity.
Before donating your car to charity, here are a few things you should consider. There are profit organizations that can sell your car and donate the money to charity. The problem is that they keep for themselves around 50 percent of the car’s value. So it’s best to avoid the middlemen and donate the car directly to the charity organization. Another problem is that not all nonprofit organizations can sell cars on their own, so if you must use an auto auction company, try finding you that has lower fees.
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