Donating Cars

When it comes to making charitable donations, one of the newer ways to go is donating cars. Donating cars to your favorite organization as a way to both assist the cause, eliminate an unneeded or unwanted car from your possession without much fuss or muss and also get yourself a nice tax deduction if the organization of your choice is a qualified charity. All you have to do to get on the band wagon of donating cars is pick up the phonebook or go to the internet and find a likely recipient for your generosity. Donating cars has become relatively popular over the last decade or so in the United States. In the year 2000, nearly three quarters of a million people declared a tax deduction for donating cars with an average tax savings of $650.

Donating cars can be as simple as calling the non profit organization and they will have the car picked up. You want to be sure you get a letter from the organization that shows they are a qualified 501(c)(3) if you want to declare the donation on your tax return. The recipient charity will follow up with the paperwork that authenticates that an actual transaction for donating cars transpired. But it is up to you, the donor to determine the value of the car and this must be done carefully. You should get to declare a fair market value and you can calculate this figure by using one of the used car buying and selling guides like the Kelley Blue Book. It must be an IRS approved organization verifying that the donor actually did donate a car and thus is entitled to the tax benefits of that car donation.

There is another method for donating cars. And that is to actually deliver your intended car donation to a charity for their use in their work, whether it is a homeless shelter or an outreach program for for the elderly or any other type of activity that the organization engages in, they can use that donated car for their purposes. The donor would again, if the organization is an IRS approved organization, receive the tax benefit for the donation in the amount of fair market value of the car that is being donated.

And of course, there is a third alternative method for donating cars. A potential donor could actually go to a car dealership and purchase a car for a charitable group and turn that new or used car over to them for their purposes and the donor would get the tax benefit again, if the organization is an IRS approved, non profit. So in any of theses ways, donating cars is a creative way for non profits to get somewhat larger amounts of donated goods or money without the donor actually digging into his or her pockets and giving out cash. Donating cars is a win, win situation.