Donating a car to charity is one of the most selfless acts that one can engage in. The vehicle taken in, cleaned up, and sent to auction with the proceeds used to fund one cause or another. Further, the charitable contribution deduction not only makes this act benevolent, but also a nice tax write off if the gift is structured properly.
Charitable donations have become ingrained into the American way of life, in large part to the tax code. Giving cash to your church, temple or other place of worship is normal fare for most Americans. Further, those with a great amount of abundance give way beyond this. Warren Buffett has given billions both to his foundation and to the Gates foundation. George Lucas contributes nearly as much to his education foundation.
One does not need to be Warren Buffett, Bill Gates of George Lucas to make a difference. In fact while each of the men just mentioned contributes massive amount relative to us mere mortals, their gifts pale by comparison to the masses when we pool ours together. With this in mind, we can all do our part and benefit from doing it. These are what we see as the three major benefits to donating a car to charity.
Give Without it Hurting
The biggest challenge to giving actual cash to charity is that you feel it. Even after the tax deduction, every dollar donated is circa 60 cents less (the after tax benefit you’ll take) in your revenue kitty. Giving a car to charity, particularly if it is just sitting in your driveway gathering rust, does not hurt. You can’t spend and old car worth say $2000. Yes you can sell it, but that takes work. Donating your car is simple. Just Google Kars4Kids (or your favorite charity) and they do virtually all the work for you; it’s easy. Hey, a $2000 tax deduction today is worth a heck of a lot more, than a $2000 payment for your beater “someday,” particularly since “someday” usually never comes!
Junk Car Removal
If you have a junk car sitting in your driveway, would you rather pay someone to have it removed or receive a little yellow donation slip and have the car charity remove it for you? Enough said on this point
Donating your car to charity will usually yield a decent tax break as well. There is one misconception that you must be aware of however. You cannot take more than the cars’ fair value today as a tax deduction. A car donation is not a license to exaggerate its value to the IRS as so many have tried in the past. A respectable charity will give you a receipt for the cars actual value. Still, you’re not donating a Christmas turkey here, even a car in bad condition has real value.
There are two remaining steps. First, consult your tax professional to ensure that you are going to get the tax break that you are looking for and Next, pick the charity that fits you beliefs and ideals. Then pick up the phone and let them take care of the rest.
You’re doing a wonderful thing….