basics

An easy way to donate to charity is by donating a car. Car donations are also an easy way to get a large tax write-off. When you donate a car to charity, one of two things happens.

One, the charity auctions off the vehicle so they can use the proceeds. Two, the charity keeps the vehicle and uses it. If the first one happens, you can claim on your taxes the final auction amount. If the second happens, you can claim the fair market value of the vehicle.

Here are 5 tips to donating a car to charity:

1. Look for charities that accept car donations directly. There are some intermediaries that accept car donations on behalf of charities, but they keep a chunk of the money. To get the most money to charity, choose a charity that takes its own car donations, like the Salvation Army.

2. Drive the car to the charity instead of letting them tow it in. If they have to tow it, then that is less money that the charity can use on their programs.

3. Only donate to tax-exempt charities with the 501 (c) (3) designation. This is the only way you can claim the donation on your taxes. You can check the charity’s status with the IRS via Publication 78 online.

4. Get your car appraised if it is worth over $5,000 because the IRS will not let you claim the donation amount unless you have an appraisal. If it is worth less than $5,000, you will be find with a Kelley Blue Book value quote.

5. Prepare to sign over the car title to the charity as soon as you make the donation. Steer clear of charities that want to you leave it blank and not sign it over yet. This leaves you liable for the car until they auction it off.