The most generous act of all is to give, and donating your car is one big act of giving. Thankfully, it can also save you taxes, and many NGOs advertise about tax cuts in their ads heavily.
But before anything else, you should get a clear idea of what donating to a charity means. You know, just do some digging before you hand over that car key of yours. Lucky for you, we have some tips to find the best non-profit organizations where you can give away your car and how you can do it!
The department of inland revenue and services emphasizes on some guidelines to follow before you donate your car. The car can only be donated if the taxpayer agrees to itemize subtractions. There are some limitations on the deduction of charitable contributions. First off, your donation cannot surpass 50% of your modified gross income.
Additional ground rules
Furthermore, if the car gets sold by charity, you can only subtract the gross profits of the sale. If the vehicle is sold for less than $500, the fair market price can be inferred (on the day you gave it away) or $500—whichever is lesser.
In case the charity shows intentions of making some improvements in the car for them to sell it later, you can subtract the fair price in the market of the vehicle on the date that you offered it. On the occasion that the company wants it to use for charitable causes, like for supplying meals to elders, you have another option to deduct the market price value right there.
Non-profit organizations that accept donations
A couple of charities that accept car donations also run their ads via TV and radio. However, NGOs aren’t the only ones that take used vehicles as donations because a lot of charities also do it. Look for charities that have noble causes, and go to their websites to check if they take car donations. Just make sure that the charity is in an authorized organization, and does what it states. Don’t get scammed while trying to do a good deed. Look for the organization on a state charity record or IRS’s tax-exempted organization database.
Pass on the title correctly
In the process of donating your vehicle to a charity, you must delegate the title properly. If you don’t, you will be responsible for mishaps or offenses committed by the succeeding buyer. Almost all legit non-profit organizations will ask you to pass on the title to them. Don’t leave the paper blank, as you will be held responsible if something wrong happens later.
Paperwork matters the most!
Be sure that you received all the necessary paperwork for the contribution and save it accordingly. Make backups of the paperwork, scan them, don’t lose them because they will be essential for any possible tax audits.