Car Donation - Charity With Clarity

A search about how to donate an old car will yield thousands, if not millions of results. All of them claiming how easy it is donate an automobile, so easy that all you have to do is pick up the phone and they’ll be at your door, tow truck in hand; not only that, you get tax breaks too.

The Truth Of The Matter

The truth of the matter is, donating a used car is not as easy as they say it is. Aside from differing state regulations, the IRS has set sanctions on car donations due to rampant fraud. For example: the state of California requires a donor to fill up a liability release form, while Maryland asks for the “Maryland Notice of Security Interest Filing”. One thing in common for all states though, is that they all require the Car Title as a prerequisite for contribution.

Finding A Qualified Charity

The most important part of giving away your car for a good cause is to look for the right charity. Finding an institution with the same agenda as yours is akin to interviewing an applicant for a certain position. The pivotal move is to ask questions. Some charities have a number of programs and may be flexible in assigning your donation to a certain goal in which you and the charity officer agree on. Unfortunately, there are some who have a specific set of purpose.

To qualify for write offs, the donation must be made to an IRS qualified charities or the following: religious organizations; state, federal, and government institutions (as long as the car donation is for public use); Non-profit hospitals and schools; Red Cross, Good Will, Meals on Wheels, Care, Salvation Army, and the Girls’ and Boy Scouts of America; and those listed in the IRS’ publication 78. A donation is not tax deductible when it is made to an individual.

Preparing For The IRS

A car title is a strict requirement for donating a car. Prepare the 1040 form and fill up schedule A. The amount of deduction is limited to 50% of the already adjusted gross amount of your income. The write off is based on the cost at which the charity sold your car (if more $500), or the fair market value if the car is less than $500.


Do not forget to take note of the location at which you donated your car, the charity and its address, the condition of your car, and the contemporaneous written acknowledgement of your contribution. All these, are needed for you to avail of the tax deduction. You have to submit all of these requirements at an IRS Specified deadline or else you cannot get a write off.

It is important to keep a second copy for your file, just in case. The great thing about all this is that the IRS actually has a number of hotlines ready to answer any questions you may have. Aside from that, an online list of charitable institutions, rules and regulations, and guidelines on how to determine the amount of your deductible are also available.

Doing Good And Profiting

No good deed goes unpaid. In this case not only do you help others, you also help yourself. Don’t be deterred by all the requirements for car donation, rules and regulations are there to benefit you. After all would you want unscrupulous people using donation to meet dishonest ends?









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