Sunday, February 24, 2013

Car Donation Charities

Car Donation Charities
Car donation charities accept donations of your scrap or used vehicles, and not only does this benefit the charity but it also benefits you. That is because your car is regarded as a tax-deductible donation so you can write it off against your taxes when you file.

You must first ensure that the charity accepting your vehicle is registered to accept tax deductible contributions, and also make sure you get a receipt to prove that the donation was made.

On receiving this proof, you can safely hand over your vehicle and then claim its value against your next tax return. Make sure that you have records of the value of the car, because this type of donation might well result in an IRS inspection to make sure that the value you are claiming was the true value of your vehicle when it was donated.

When you donate a car to charity, the cars that are donated can be of two types: those still in good working order and those useful only for scrap. Here is how each type of car will benefit both you and the charity:

1. Scrap Cars

What benefits do you get by donating a scrap car apart from the warm glow of helping a charity to help others? You get the benefit of having your old vehicle removed free of charge, and also of knowing that it will be put to good use in the recovery of the steel to build new vehicles. The oil is also recycled, and it has been estimated that Car donation charities contribute significantly to over 10 million gallons of oil that is recycled each year by the auto recycling industry.

You can also claim a sum against tax for the scrap value of the car. Generally, you have no work to do when you offer your car to car donation charities. They arrange the collection of the vehicle, provide you with documentary evidence of the donation for the IRS, and that’s about it! It’s a very simply process, which is why so many individuals and businesses are pleased to use such services.

Many people are under the mistaken opinion that they get paid when they offer their vehicle for scrap. On the contrary – you generally have to pay the merchant to take it away, and that is why car donation charities are so popular and so successful. They not only save people money in remove their scrap cars free of charge, but they can also make money due to the volume of scrap metal and oil they are handling.

2. Functional Cars
Many cars received by car donation charities are in working order, and in this case the donor receives a tax deduction equivalent to the sale price of the car. If the charity decides to use the car for its own use (saving them purchasing a car) then you can claim the estimated value of the car against tax, and the charity benefits by being able to offer a car to their workers at no cost.

However, if it is sold at auction then you claim the amount for which it was sold. Car donation charities receive amazingly large numbers of cars that are still working, but for which their owners would rather receive the tax benefit by donating it rather than accrue more tax by selling it.

The Legal Aspects

The legal aspects of a persons donation relate to the IRS (who else!). If your car is worth over $500, you must complete Section A of IRS Form 8283. If worth up to $5,000, use one of the recognized books, such as the Kelly Blue book for its market value. For over $5,000. You should get an independent valuation for your car and also complete Section B of Form 8283. Take photographs of the car and retain any receipts you still have relating to parts or tires that have been recently purchased for the car. You can claim for these.

This all might seem a lot of work, but it is not as difficult as it seems and you are getting two major benefits from it:

a) You get the warmth in your heart of knowing that you are helping people less fortunate than yourself,
b) You are getting your old car taken away free rather than paying for it, and
c) You are getting a tax deduction for the value of a car that you might otherwise just have let go for scrap, or maybe sold for a lot less than your tax claim might be.

You can use car donation charities to your benefit if you understand how, and we will show you exactly what you must do to take advantage of each of these benefits. You have surprisingly little to do when you donate a car to charity, because the charities do most of it: they collect your car, dispose of or sell it, and we help you every step of the way to make sure you’re getting the best for you.

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Steps to Donate Your Car

Steps to Donate Your Car
We’ve gone over the many ways on how to look for charities when you want to donate your car, but what we need to work on now are the steps you should take to make sure it goes extremely smooth for you.

1. Why are you wanting to donate your car? Is it not running, does it sit in the driveway and never move, is it an extra car that you don’t need, will a tax benefit help you more than what the car is doing for you?

For most people, when a car has been giving them troubles or it’s been broken down more than it’s been running, that is sometimes the first red flag that might make you think it’s time to move onto something else instead of sinking more and more money into it. You have to take into consideration that if you do get the car running, was it really worth it?

2. Next is to get your paperwork in order. If the car belongs to you then it’ll be the easiest way to get started. You’ll need the registration papers to show that you own the vehicle. If you can’t find them, don’t worry. A trip to your DMV (department of motor vehicles) will help you file for a lost title.

They’ll help you get the correct applications and get that title replaced. This is important, if you can’t show proof that you own the vehicle outright and that there are no liens on it, nobody will touch your donation. They legally can’t take ownership if it belongs to somebody else.

3. Once you’ve got your paperwork in order, now it’s time to find the charity that works for you. This is where you make the choice of who you want to donate your vehicle too. If there is a charity that has helped a family member or friend out then maybe that’s one for you to consider. It’s always best to help out the ones that helped you out before because there are many others out there that will be needing help in the future.

4. Contact the charity that you’ve chosen and ask them a few questions:

Do they offer free pickup? This means will they send a tow truck out free of charge to you in order to pick up the vehicle you’re wanting to donate.

Will they give you a receipt for the vehicle? You must have proof that they took ownership and that you will be getting a future tax break when they sell the car.

After all this is done, now it’s time to wait. From here the charity takes your car back and begins the process. If it wasn’t running or in need of some repairs, the charity will more than likely have a contract with a local repair shop to work in it and get it back into running condition. This of course will cut into the net profit of the car being sold but in reality it’s more than they had to begin with. If they spend $500 dollars on getting the car fixed and it only sells for $2,000.00 then they’re net profit will be $1,500.00 but that’s better than them getting nothing at all.

Be sure and follow this list when you’re wanting to donate your car and it’ll help you make it a smooth process.

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Donate A Car for Charity

When you are looking to donate a car for charity, there are usually several questions that should come to your mind that we’ll go over in this article. Being armed with the best knowledge is the best and only way you start this off before doing anything.

Why donate a car to charity?

This comes with several answers for some people. A few examples could be that somebody has a vehicle in their driveway or yard that is no longer wanted or needed and the owner doesn’t any other way to get rid of it. The vehicle might not be running anymore and an easy repair can’t get it running (most car donation charities will pick up your car whether it runs or not). Then some might have an extra vehicle that isn’t used but they could use a tax deduction for the year. When the car sells you get to deduct the actual amount it sells for from your current taxes.

How to donate a car to charity. (see How to Donate a Car for more information)

This will mainly depend on where you are located and if your area has a charity that meets your wants as well. You can check out the states we have listed here to see if your location is on there or if you have a charity in mind, you can call them directly and see if they are open to being given a car donation for a tax deduction in return.

Best place to donate a car? (see our locations by state and city)

For most people, where to donate your car, truck, or whatever they want to get rid of can be a preference made based on what touches them personally. If you’ve had a family member or close friend that had a bout with breast cancer then you might look at some local charities that support breast cancer research and support to affected families. This way you’ll feel good knowing that you’ve helped support a good cause and in some ways they helped your friends or family when it was their time of need.

Can you donate a old car?
This is a popular question for most people that think their vehicle wouldn’t be accepted. Believe it or not, your car doesn’t have to be running most of the time for it to be approved for a donation. It’s always best to check with the organization first to make sure but what most of them do is have the car repaired and make ready to sell. Once it’s ready and it sold, they deduct the cost of repairs from the sale price and that amount is what your deduction will be. Other than that, it doesn’t matter how old your car is as long as it holds some kind of value then the charity will take it.

Can you donate a car for cash?
When you donate a car to a charity, they won’t just hand you cash for it. You’ll get a receipt showing that they accepted the car and then your deduction amount is dependent on how much they can sell it for. After it’s sold, they’ll update you with the correct price and make sure you get it in writing for your taxes.

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Car Donation Value

Car Donation Value

Car Donation Value
One of the biggest hurdles people face when thinking about donating their vehicle is the car donation value. We’ll go over some ways to help you figure out realistic values for you to go by in helping you make the decision as to where this is something you want to do or not.

Here we’ll go over three different agencies you can use to figure out your car donation value. Each will usually be pretty consistent with the other depending on the options you have on your vehicle.

Kelly Blue Book: Find the official Kelly Blue Book value for your car, SUV, van or truck. Their website is free to use and is one of your best sources for new and used car values.

Here you’ll enter in the make and model of your car and complete the online form on their website to help you come up with the fair market value or car donation value. There are a few values you’ll have to enter in such as mileage, the condition it’s in, and anything else about this vehicle they have listed.
If you look at the trade in value, that’s completely different from fair market value. The trade in value is what the dealership will be willing to give you in order to keep their profit margins high.

NADA Appraisal Guides: Used vehicle pricing and information for automobiles, classic cars, motorcycles, boats, recreational vehicles, aircraft and manufactured housing.

Edmunds: Edmunds provides pricing for new and used vehicles based on your zip code location. Edmunds is another good source to help you get the fair market value and has an extensive database of new and used cars.

TIP: A good thing to remember when trying to figure out the value of your vehicle is what kind of demand is out there for it? If your car is high in demand or not a common vehicle, the fair market value can be more than what books or online sites are telling you. What you can do is pick up an Auto Trader magazine, look at some online classifieds such as Craigs to get an idea of what your’s is selling for in your area. Also by using these resources, you can get an even better idea of your car donation value.

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Car Donation Tips

Car Donation Tips
When you’re looking at taking a step like this, it’s always best to have to some car donation tips to go by. We’ve come up with the most important ones here so be sure and print these out to help you when tracking items down.

Find the Title

If you want to donate your car to charity, you’ll need the title for it. If for some reason you can’t find it, it’s damaged beyond recognition, or if you just don’t want to look for it, you’ll need to contact your local DMV (Department of Motor Vehicles) to start the process of getting a duplicate title. Many of them will have the steps online to save yourself a wasted trip there to stand in line for hours. Some places will take your car donation without a title but only if it’s to be sold for parts or salvage.

Figure out your vehicle’s value:

You should always have an idea of how much your donation will be worth so as to not be taken advantage of. There are several place where you can check the value online but the best that we’ve seen and what most people go by is Kelly Blue Book (KBB). Be honest with yourself when grading the condition of your car so that you’re not setting yourself up for any grief it you and your charity don’t match on values. It’s sometimes to plan on a little lower expectations because most of the time cars are sold for less than the blue book value.

The donation is a tax deduction to let’s go over the categories:

1. If you car donation is of low value, you will always be able to claim a fair market value of up to $500.00 and no additional paperwork is required.

2. If your donation is worth more than $500.00, your deduction will be the amount that it sales for.
If you donate a car that is worth more then $500.00, your deduction will be limited to the actual sale price of your car donation.This means that you won’t really know the amount of your tax deduction until the car actually sales and sometimes it might be in your favor. Most charities will work hard to make sure that top dollar is gotten because it helps them out as well. So if you thought your car was worth $2,000.00 but it actually sales for $2,300.00 then that’s an extra $300.00 for your pocket.

If your car is in good running condition and considered a reliable mode of transportation, most of the time it would be used for the charity instead of them selling it for the cash. If this happens, then you can generally claim the car’s fair market value on your taxes.

Locate your choice of Charity

When you start the process of looking at local charities, be sure and ask them if they will provide a pickup service for your car or truck. This way you won’t have to worry about getting it there unless it’s in good running condition. Most charities will offer this as a free service.

Is the organization registered with the IRS as a nonprofit?

Before you hand over those keys you’ll want to make sure they are qualified as a 501(c)3  charity. This means they are a non profit and you can ask for proof of this. If you don’t verify they are registered with the IRS, you might be just giving your car away and not able to get a deduction. You can verify the organizations status by checking the IRS website by searching Publication 78. This is a list of approved organizations.

When determining your charity tax deduction, you need to remember that you can’t go with the standard deductions and that your tax return deductions must be itemized. If you’re not concerned with getting a tax deduction by donating your car then this isn’t a worry but if you do be sure and itemize your deductions. Sometimes it might be best to get professional help if you’re dealing with a large deduction amount.

The last thing to do is to gather up the IRS forms needed to claim your car donation tax deduction. If all of your charitable donations and non-cash items equal a value or more than $500 during the tax year, you’ll need to fill out the fax form 8283 and can be downloaded direction from the IRS. IRS form 8283

By following these car donation tips, you’ll be able to make this a much smoother process for both you and the charity that you want to help out.

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Charity Car Auction

Charity Car Auction
Unless you’re in the business, knowing exactly how a charity car auction works is nothing short of a mystery. Now in reality, if you’re going to donate your car you’re not concerned with anything else but getting your tax deduction and getting it now. But, just in case you do, keep reading!

The sole purpose of a charity car auction is to raise funds for the actual charity of your choice. How this got started was that charities had to find ways to keep the funds coming in to continue their good hearted work but to also do it in a way that wouldn’t cost them a lot of money either.

If you look at it in the big picture there are three persons involved in this being you, the charity, and the buyer. For you, you’re looking at a way to either clean up your yard, get rid of a headache, or get a much needed tax deduction. The charity that you chose, needs operating monies. With the money made from the auction of your car, truck, boat, etc., it goes straight to your charity. The actual buyer, he just gets a good deal.

If you want more information, don’t be afraid to go to the charity in person and talk to them. Find out how much of the auction money do the receive from each donation and where it goes. Another good thing to know is actually how much money they get from the sale and that it’s not getting pocketed by the company that might be handling the auctions for the charity.

Sometimes the charity is like us, they don’t have the time to handle the auctions themselves or locally and contract it out to other companies. This company handles getting the tow truck to your vehicle and bringing it back. Then they clean it up and make it pretty and sometimes make small repairs but only if the repairs will help the resale value. After the vehicle is ready, they then handle all of the auction details. Again what you want to make sure is that these companies are actually getting more money from the sale then the charity is.

Becoming more and more popular are online car auctions for charities. Both the seller and buyer must register on this site and then you can fill out your necessary banking information. The starting price is put up based on the value of it and condition. Hopefully this helped clear the air for you on how a charity car auction works. If not please contact us with any questions and you can check out our tips (link) page as well. Wikipedia has a good article on how a charity car auction works as well.

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Donate a Car to Charity

Donate a Car to Charity
There are several reasons why you should donate a car to charity, one being a sense of satisfaction and fulfillment in helping others. However, there are also more practical reasons, and here are just some of these that are worth considering.

A car donation is an easy way to get rid of your old car than trying to trade it in or sell it yourself. You have no advertising costs, and no extra phone bills. Nor are you waiting day after day to get your old car moved from your garage, and you don’t have to stay at home waiting for callers or potential buyers visiting to have a look at the vehicle.

Although these may seem spurious reasons for car donation at first glance, many people trying to sell their old cars report an increasing sense of frustration as time goes by and they still haven’t found a buyer. Some end up trying to sell it for scrap and find it costs them money to have it towed away.
This is not the case when you donate a car to charity.  The whole process can be over within 48 hours without it costing you a cent, and you even get it taken it away free.

Tax Deductions for Donating a Car to Charity

You will likely be eligible for a tax deduction if you donate a car to charity. The charity must be registered, and full details of what is required and how much you can claim are detailed in IRS Publication 4303. In many cases, you can get more money back in tax than the financial benefits of trying to sell the car yourself when you take advertising and insurance costs into consideration.
Basically, if the charity sells the car then you can claim the gross amount of the sale in your tax return. If the charity decides to use the car or repair/improve it before using it, you can claim the fair market value of the car when donated – before the improvement. The same is true if the charity improves then sells the car – you can receive the fair market value of the vehicle when donated.
Everything you need to know about the procedures required when claiming tax for a donated vehicle is detailed in the above IRS Publication. The charity you choose will also give you advice and help regarding this.

Promotional Benefits for Donating a Car to Charity

Some charities will offer a non-cash benefit for donating your car. These are generally promotional benefits that do not cost the charity money, but are used by businesses such as hotel chains and travel firms to promote their business.

Among such offerings are travel vouchers that allow you free travel or travel at discount prices and vacation vouchers. These can offer you free hotel weekends, free cruises or other types of vacation. You may also be offered store discount vouchers – all of which are useful if you are able to use them.
Not all charities can offer such reward for donating your car, but that doesn’t mean you should not use them.  Some may have a commitment that appeals to you, while others may spend all their income on the charity and less on advertising and staff. You should be able to establish these figure if you have a need to, and simply asking them is usually sufficient.

Recap of Benefits

To recap, then, the main benefits you enjoy when you donate a car to charity are:
  • Tax benefits:  you can reclaim the value of your car or the selling price in your tax return
  • Simplicity: you can be rid of your old car free of charge without having to sell it or keep it taxed or insured.
  • Save time:  you will avoid advertising costs and save time in having your old car taken away. You don’t have to wait at home for telephone calls or visits from potential buyers.
  • Free towing: you don’t have to pay to have your old car towed away.
  • No bureaucracy: save on the Department of Motor Vehicles paperwork needed if you transferred the car yourself. All that is taken care of for you.
  • Feel Good:  you will feel good when you donate a car to charity – it is better to give than to receive.
  • Helping Charity:  you will be helping the charity to do its work, whether it can use your car in its work or sell it to raise finance.
When you donate a car to charity rather than fix it up and try to sell it yourself or attempt to get somebody to give you money for taking it away as scrap (ha-ha!), you will be helping the millions of starving children in the world, all the autistic kids that need special education and those seeking cures for cancer, muscular dystrophy and MS among many other killer diseases.

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