Charitable organizations say that the contributions they receive decrease as the need for their services increases which is perhaps the biggest level in our lives.
In this economy, many of us are in a small position to help. But there is at least one thing we can do. Most of us ultimately need to change our car, and when the time comes, we can offer our old car as a donation to charity.
Many people have offered their cars for donations. There were 311,451 vehicle donations in 2005 valued at an average of $ 1,508 each, according to the IRS.
Offering a car for donations is usually a fairly easy thing to do. Most programs that handle car donations will pull your car for free. In general, they will accept cars that are not running or that cannot pass state emission standards.
There are tax deductions available to offer your car for donations. However, if you have done this before, you should be aware that the tax rules are not as cheap as they were in the past.
Prior to 2005, available tax deductions were the same as the fair market value of the cars offered for donations.
Now, you can usually only reduce the fair market value if the car is worth less than $ 500.
Charities or companies that run their car donation programs will often resell the cars they receive. Under the current tax law, you can only reduce the amount equal to the resale price, unless the car is worth less than $ 500.
Make sure your charity gives you written documentation from sales. The charity is required to provide documentation within 30 days.
Some other things to consider if you offer your car to donate:
In most states, it is the responsibility of donors to notify their state motor vehicle departments of changes to registration after donating their cars. Don’t forget to do this. If you fail to notify the DMV of ownership changes, you can be charged a parking ticket fee and other penalties for violations committed by the next car owner.
Also, in deciding what charitable donations you might want to ask a few questions about their vehicle donation program. The California Attorney General’s Office found in 2005 that in 2004, less than half of the proceeds obtained through vehicle charity donations in California eventually went to charities. The rest goes to commercial fundraising contracted by charities to manage their vehicle donation program.