Donate Car: The BEST TAX DEDUCTION
Federal regulations have changed recently in the area of car donation, and there's a lot of misinformation floating around for those who want to donate a car for tax deduction. It seems like with these new regulations, it's no longer a financially good choice to donate a car. However, this analysis is an oversimplification. Donating your car can be financially beneficial; it just depends on whom you donate it to.
Donate a Car for Tax Deduction
Vehicles for Change is an organization that accepts a variety of car types for donation and provides them to families in need. The vehicle you're considering donating probably falls under one of these four categories:
- A vehicle in good condition a family can use. These cars, trucks, or SUVS typically have less than 150,000 miles on them and are usually 10-12 years old. These cars can normally be fixed up for use for under $1000. After they are repaired by Vehicles for Change technicians, they will give at least two years of reliable service. The donor of these vehicles receives the full fair market price in tax deductions.
- A luxury vehicle in good condition. Luxury vehicles are typically expensive to maintain and repair. Therefore, they aren't ideal vehicles for lower-income families. With this in mind, Vehicles for Change performs the repairs and then sells the repaired vehicles to Freedom Wheels – a non-profit used car organization operated by Vehicles for Change. The proceeds from these sales allow Vehicles for Change to repair more cars for families in need. People who donate these luxury cars receive the selling price in deductions, which is usually around the fair market value.
- A vehicle that needs a major repair, but is otherwise in good condition. Typically, these vehicles aren't ideal for donating to a needy family. Therefore, these vehicles are sold to Freedom Wheels. People who donate these kinds of cars receive deductions for the full fair market value of the car, minus the estimated cost of the repairs. This estimate is provided by Vehicles for Change.
- A vehicle that isn't financially feasible to repair. Some cars are too damaged to be worth repairing by Vehicles for Change. Technicians from the organization will perform minor repairs and then auction it off to the organization's partners, usually with a minimum bid. Proceeds go to repairing more vehicles for families in need. Donors can donate the selling price of the car from their taxes, which is usually 1/3 to ½ of fair market value.
When you donate a car, tax deduction can be substantial, making car donation one of the most financially sound ways of getting rid of an unwanted vehicle. What's more, you can help your community by choosing to donate.
Why Donate to Vehicles for Change?
Tax deduction can be very substantial if you donate a car, so why is there so much information online saying otherwise? This has to do with the nature of Vehicles for Change as an organization. The fact is, 99% of charities who accept donated cars sell the cars. When they accept cars, they have the resell value in mind. Vehicles for Change is different.
Money is needed by all charities. The mission of Vehicles for Change, however, is to donate cars to families in need. Many families are stuck in poverty despite being qualified for high-paying jobs. There are many areas in the United States without public transportation; however, even in areas with reliable public transportation, running errands and getting to work is difficult. Also, in many cases, the breadwinners of many lower-income families are paid by the hour. This means if inclement weather or sickness prevents them from reaching their job, they are not paid. Even one day without pay can be a big problem for a family without much money to go around.
When charities resell cars, they take into account only the monetary value of the car, but Vehicles for Change is different; the Vehicles for Change approach gets vehicles to people in need and gives donors significant benefits as well.
Who Benefits from Vehicles for Change?
Vehicles for Change is, therefore, a different kind of charitable organization. So, who benefits from the organization's approach?
- You. By donating to Vehicles for Change, you make a solid financial decision. Those who donate a car for tax deduction can't do any better than an organization like Vehicles for Change. The company's approach of donating the vehicle rather than flipping the vehicle for money is what gives you the tax benefits you deserve for such a large donation.
- Lower-income families. Donated food and money can only go so far for lower-income families. Food and money run out. However, when earners in lower-income families are able to make their own money, they can achieve a financial stability that was previously only a dream. Vehicles for Change provides independence, stability, and a real chance for advancement.
- Your community. A community is made up of families. When just one of these families go hungry, they whole community suffers. By donating a vehicle, you are taking responsibility for your position in the community. Having a car gather dust in your garage or driveway doesn't do anyone any good. By donating your car, you give something of great tangible value. Your whole community benefits from your generosity.
- The world. Hunger, poverty, and suffering anywhere in the world are our collective responsibility. By taking steps to help one family, you can make a different in the entire world.
Vehicles for Change is not just another charity. When you donate a car, the tax deduction provided by Vehicles for Change helps you, and the car itself allows for concrete improvement in the lives and prospects of a family.
Documents Necessary for Car Donation
Car donation is actually a very simple process that only requires a few documents. Whether you want to donate a car for tax deduction, to do good for your community, or both, the documents required aren't difficult to obtain and prepare.
Requirements for donating a car vary state by state. Vehicles for Change accepts cars from all over the country on a case-by-case basis. As the organization is located in Maryland, almost all vehicles in Maryland, Virginia, and Washington, D.C., are accepted. The document always required for donating a car is the title. To legally donate a car to charity, the title must be transferred to the charitable organization.
First, you must request a duplicate of the car's title from your local DMV. This can often be done online. Then, you must print and sign your name under the “seller” line. If there are two people on the title, both need to print and sign. Under “buyer,” it is necessary to write the name of the organization you are donating to; in this case Vehicles for Change. Be sure to fill the information out correctly the first time. The DMV is strict about these documents, and they won't accept them if there are things scribbled out. Once you are finished, be sure to make a copy for your records.
If you used the services of an institution to finance your purchase of the vehicle and this is referenced in the vehicle's title, you will probably need a lien release. This is simple. Contact the lending institution to ask for a letter confirming you paid off your vehicle in full. This letter should be on the institution's letterhead, and should include the make, model, year, and VIN of the car.
These documents are simple to obtain and prepare. Donating a car is certainly not the complicated process it is made out to be.
Why Donate a Car Instead of Simply Giving Money?
Donating a car to charity might seem excessive. If you want to do something good, you may ask yourself, why not donate money?
The fact is most financial donations are a one-time thing. Donated money and food run out. What's more, a lower-income family is left dependent on the will of a charitable institution. If the institution isn't prompt in distributing these funds, a family might be left in the lurch with nowhere to turn.
There is also the issue of pride. Poverty is not a crime or a failing. However, our cultural values in the United States leave many lower-income people feeling as if it is. It can be difficult for one to ask for much needed assistance when shame is such a powerful emotion. A car donated to Vehicles for Change is purchased by lower-income families at a price they can afford. The vehicle is guaranteed to run for at least two years. Not only is this is a longer lasting donation than most financial contributions, but the car presents the family with the opportunity to help itself.
Vehicles for Change works with people to give them the solutions they need. Donate a car for tax deduction, and a chance for independence and advancement is more possible than a one-time financial donation can provide.
Donating a Car, Step by Step
Not only is obtaining the necessary documentation for car donation a breeze, the process itself is as simple. To donate a car for tax deduction, obtain these documents and properly fill them out. Then, visit Vehicles for Change online. The organization has a simple form that takes less than ten minutes to complete. It can be completed online or printed out to be filled out manually, and a hard copy can be emailed, faxed, or mailed.
The form asks for information about the donor and the vehicle. The information is kept strictly confidential. If a physical copy is submitted, it's shredded once Vehicles for Change finishes with it.
Once the documentation is submitted, Vehicles for Change will contact you to set a pick up time. You meet the tow truck yourself to turn over the necessary documentation and the keys. Then, after your vehicle information is processed, the tax receipt is mailed to you. This is how simple it is to donate a car for tax deduction.
Vehicles for Change by the Numbers
Since 1999, Vehicles for Change has awarded 5,000 vehicles to families in need. The benefits these families have received from these donated vehicles have been life-changing. 75% of the recipients reported missing far fewer days of work than they did before they had cars. The same percentage also within the first year of owning their vehicles were able to increase their earnings or even get an entirely new, and better, job. The average annual increase in earnings was $7,000.
The daily commute of vehicle recipients was decreased by a full 90 minutes. 93% reported decreased levels of stress, which wasn't the only health benefit. 98% were able to take their children to the doctor, and 87% were able to participate in activities beneficial to their health.
Families were also able to become more involved in their communities as a result of their new vehicles. A full 100% of recipients reported taking their children to after school activities. 55% volunteered in the community, and 75% attended religious services.
Help Your Community, Help the World
When you donate a car for tax deduction, you also donate a car to change the world. Contact Vehicles for Change today.