Donating your car can benefit a charity – and your tax return.
A vehicle donation is worth a tax deduction of at least a $500, and since many charity groups accept vehicles in any condition, the tax break can even be worthwhile for Western New Yorkers with weather-battered clunkers.
“We take all vehicles, whether they run or not. They all benefit the charity in some way or another,” said Jeff Schoenhofen, a car donation specialist for Wheels for Wishes, which administers the vehicle donation programs for the Make-A-Wish Foundation branches around the country. “We take a lot of nice vehicles, but we also take cars that are not,” he said.
So even if your vehicle is marred by rust, idled by a blown engine or flat tires, you can find value in it by making it a charitable donation. In the case of operational vehicles, donating them can take the hassle out of trying to sell them.
Since Superstorm Sandy, Wheels for Wishes has seen an increase number of donations of vehicles that were flooded in the storm, Schoenhofen said. “Those will still benefit us,” he said.
The Salvation Army nationally has a similar policy for donations, which applies to all types of vehicles, and provides free towing.
“The Salvation Army happily accepts just about any type of vehicle, including cars, trucks, boats, motorcycles, RVs and more,” said Tim Raines II, marketing manager of the Salvation Army.
The local Salvation Army operates its own vehicle donation program for cars, regardless of mileage, that are in running condition.
The area branch gets about a dozen donations a year, and it also coordinates its own silent auctions – one in the spring and one in the fall. The local chapter distributes flyers advertising the vehicles, and sealed bids are requested.
A month or two later, the bids are opened and the highest bidder receives the car.
Money from the sales of donated vehicles goes to fund the various programs run by non-profits organizations.
“Vehicles donated to The Salvation Army directly support our Adult Rehabilitation Centers where men and women who have lost everything to alcohol, drugs, homelessness and other life issues receive help and hope,” Raines said. “There are over 100 of these centers across the country.”
Wheels for Wishes’ efforts is one of many fund raisers that help the Make-A-Wish Foundation grant wishes of disadvantaged and ill.
“We provide a great deal of help to the overall effort,” Schoenhofen said.
Donations are usually towed to a vehicle auction facility where buyers gather to buy functioning vehicles or the parts of non-operating ones.
“They are still auctioned off for parts and scrap metal,” Schoenhofen said.
If you’re considering making a donation, experts said you also shouldn’t be deterred by the donation process.
“There really aren’t a lot of guidelines and restrictions,” Raines said.
However, to maximize the benefit for the charity and yourself, there are few things to keep in mind.
For example, if your donation is worth more than $500, you must obtain a written acknowledgement from the charity before claiming the tax deduction.
Additionally, these five items should be marked on your checklist:
• Make sure you’re donating to a 501(c)(3) charitable organization if you want a tax deduction. You can look up the charity by searching its name on the Exempt Organizations Select Check at irs.gov or by calling (877) 829-5500. You can look up the group’s tax filing at guidestar.org.
• You get the tax benefit only if you itemize expenses on your return. Although there are exceptions, the amount of an allowed tax deduction above $500 is usually equal to the amount the charity gets when it sells the vehicle
• The exceptions might allow you to deduct the fair market value of the car, which will often be higher than the sale price. Those exceptions apply if the charity uses the car itself, makes substantial repairs before selling the vehicle or sells it to a needy individual for a discount. Keep any documentation that verifies the allowed exceptions.
• Avoid liability by signing over the registration to the charity yourself. That way you’re sure the car won’t remain in your name, which could leave you on the hook with the state Department of Motor Vehicles for fees or even with law enforcement if the car is later used in a crime.
• Ask to see the agreement the charity has with the for-profit company that collects and sells vehicles on its behalf. If the charity gets less than half the proceeds, you could be dealing with an inefficiently run program, Charity Navigator President Daniel Borochoff said.
If you’d like to make a donation to the Salvation Army or obtain more information, call 800-728-7825 or visit us at sacardonation.org. For Wheels for Wishes, call 877-431-9474 or visit www.wheelsforwishes.org
This report contains material from the Los Angeles Times. email: firstname.lastname@example.org