Donating a Car

Donating a Car to Charity

Donating a car to charity requires evaluating your personal priorities. For example:

• What causes are important to you? Do you want to help the hungry? Promote literacy among disadvantaged schoolchildren? Offer job training to the disabled?

• Where do you want to make an impact? Do you want to help a charity in your community or one that works across the globe?

• How does your donation fit in with your previous charitable giving? If you already have an established relationship with one or more charities, do you wish to work with these groups or find a new organization to assist?

Noteworthy Charities

Some of the many charities that accept vehicle donations include:

• World Vision

• US Doctors for Africa

• Angelcare Children's International

• Operation Family Fund

• Heritage for the Blind

• The Breast Cancer Fund

• Mercy for Animals

• Outreach Center for Children

Procedures for donating vehicles can vary, so it's important to ask for as much information as possible before committing to a donation. For example, you may want to ask whether or not the car needs to be in working condition and if the charity is able to pay for any associated towing costs.

Once you've decided to donate your car to charity, you'll need to follow the same title transfer process you would normally use when selling your vehicle to a dealership or private individual. In many cases, the organization accepting your donation will provide assistance in helping you to complete the appropriate paperwork. Alternatively, you may contact the nearest Illinois driver services office for additional information.

A Word of Caution

While it's a noble gesture to donate your car to a good cause, make sure you take the time to do your homework. Unfortunately, some unscrupulous individuals will seek donations from Illinois motorists under the guise of a charitable organization. GuideStar and Charity Navigator are two Web sites that can help you research a charity's mission, goals, and financial health before you decide to donate to the organization.

Earning a Tax Deduction for Your Vehicle Donation

Did you know that donating your car to a charity classified as a section 501(c)(3) organization can earn you a significant tax deduction? You may check the status of a particular charity by reviewing IRS Publication 78: Cumulative List of Organizations. Religious groups may not be listed in this document because they're not required to apply to the IRS, though they are qualified. To learn more about whether or not the charity you've selected is classified as a section 501(c)(3) organization, call the IRS Customer Account Services division for Tax Exempt and Government Entities at (877) 829-5500.

Determining the Deduction

Illinois taxpayers who itemize deductions on Schedule A of Form 1040 are be eligible to receive a deduction based on the fair market value of the donated vehicle. However, it's important to realize that this is not necessarily the Kelley Blue Book value of your car. For additional information regarding how deduction amounts are calculated, see IRS Publication 561: Determining the Value of Donated Property.

If the amount of your anticipated deduction is more than $250, you should request a written acknowledgment of your donation from the charity. Although you do not need to submit this documentation with your tax return, it should be kept on file in case you are asked to verify your donation.

If you have questions about the possible tax implications of donating your vehicle to charity, it's recommended that you contact an experienced accountant for additional information.