The ABCs of Car Donation – L is for Learn

Learn everything you can about the entire car donation process and its benefits to you. First, learn whether you can claim the tax deduction you will receive for donating your car to charity.  You can only claim the tax deduction if you itemize on your federal income tax return. 

If you regularly itemize on your taxes, you will get a financial benefit if you donate your car. If you do not normally itemize, you should learn whether you will be able to if you donate car to charity. A simple way to learn whether it will make a difference is to re-calculate your previous years’ taxes as if you donated a car. If car donation would have allowed you to itemize on your taxes last year, it probably will this year as long as there are no other major changes in your financial situation.

Next, learn what charities will let you donate your car to charity based on its condition.  Many charities will only accept vehicles that are under ten years old, run and have no significant problems, rust or body damage. If your car does not fall into this category, you only have to do a little research to learn what charities will accept it.

Once you compile a list of charities, learn all you can about them. One of the first things you will want to learn is whether the charity is an IRS qualified organization. If you donate car to an unqualified organization, you will not be able to claim your tax deduction. In general, qualified organizations are 501 (c) (3) organizations. The internet contains a lot of helpful information regarding car donations. To learn more go online to I R S Publication 78. Other things you will want to learn about the charity are their reputation in general, any complaints that have been filed against them, the portion of proceeds from car donations that go toward charitable purposes, etc.

Next, you will want to learn about the entire charity car donation process. Learn where and how to sign over the title to your used car. You are the seller and will need to sign the title in the space marked seller’s signature. You need to sign your name as it appears on the title. If there is a lien listed on the title, you need to learn whether a lien release is necessary.

Once you sign the title, you need to learn what to do with it. Some charities ask you to leave it in the car to make the pickup easier for them. This is never a good idea. Some will ask you to give the title to the towing service when they pick up the car. Still some charities will ask you to mail the title to them. This is definitely the safest way. It is safer for you to have it in the hands of the charity rather than those of the towing service.

You also need to learn what to do with your license plates. Most states require you to remove them while others do not.  

Finally, learn what type of documentation you will receive from the charity you donate your car to. Things will go perfectly smooth if you choose cars4charities.org to donate your car to. If you would prefer to call them at 1-866-448-3487 they would be happy to explain the whole car donation process. They are known for their extreme knowledge of car donation and are easy to work with. If your car is sold for $500 or more the IRS requires the charity to provide you with Form 1098-C for your taxes. The more information you have about car donation the smoother the process will be for both you and the charity you choose to donate car to.