You have a car you want to get out of your hands. Your gut reaction is likely to put it on a site like Craigslist or browse Carvana and see what you can get for it.
Someone suggests you donate your car to charity. You hadn’t even thought about it until now: you could take the car out of your hand and do a world of good by donating it to charity. That’s a great idea, right?
Unfortunately, anything that has a positive side has a shadow that obscures the image we have of it. Car donation to charity is no exception to this rule. Let’s explore them piece by piece:
Donating your car to charity, while heartwarming, is nothing short of a headache. The convoluted paperwork process alone will prevent you from reaping your tax benefits.
Combine that with finding the right kind of charity, the right market value for your car, understanding exactly how the charity will use your vehicle, acquiring the necessary tax forms, and reading the necessary IRS material, and you’re ready for a mountain. confusing and boring work.
People continually donate cars to charity for the greater good. However, for those with less altruistic motives, the tax deduction is an attraction towards the donation. Unfortunately, the deduction for a donated car is not always as large as one would expect.
Some factors affect the deduction; How much the charity sells the car is one of them. Some charities may sell cars at an auction for as little as $ 50. Unless the charity uses the car, instead of selling it, you will most likely not be able to deduct the full value of the vehicle.
How to have your own cake and donate it too
You still want to donate your vehicle to charity, but the downsides are a bit of a twist. Fortunately, there is a solution to these obstacles: sell it!
Selling your car instead of donating it is a solution to most pitfalls. Now, this option may seem counterintuitive to your goal of donating the vehicle, however, it does contain some important benefits that are worth exploring.
The biggest benefit of selling your car gifts is that a buyer will give you the money immediately. “One bird in the hand is worth two in the bush” applies here; As far as getting rid of your car is concerned, having certain money now is worth a lot more than having potential money later on. No “waiting for tax benefits” to reap your reward.