Car charity donation used to be more difficult before the new tax regulations that are applying since 2005. Because car charity donation used to be a great opportunity for dishonest or greedy people to make tax deduction claims higher than the actual value of the vehicle that they had donated, the government stepped in and promulgated new used car donation tax regulations. According to the new tax regulations, the donor can only deduct from his taxes the selling price of the car.Almost every important charity accepts a used car donation. The cars are sold in charity auctions and the money goes to the people that need it. You get a recipe that states the selling price of the car. This recipe will be very useful when you claim your tax deductions.

Are there any hidden facts about used car donation that I should be aware of?

First of all, not every used car donation programs are functioning legally. Before you make your used car donation, you should check with the IRS if the charity is a non-profit organization listed under paragraph 501 (c) (3) in the IRS Publication 78. Secondly, check out if the used car donation program is run in-house by the charity itself or by a third party. If a third party is operating the used car donation program, you should ask what percent of the profit made by selling the donated cars actually goes to the charity. Often, third-party operated used car donation programs produce small amounts of money for the charity. Smaller charities do not afford the costs of transportation and storage for the donated cars, not to mention the costs involved in charity auctions. This is the main reason why charities accept to have their used car donation programs run buy third-party brokers.

Car donation centers

Giving your vehicle to a car donation center is a gesture of good will and generosity that helps the charity of your choice to make a difference in the life of people in need. A car donation center usually refers to a middle agent between you (the donor) and the charity you wish to help (the recipient of your donation). The car donation center handles all the documents required in order to make the donation, picks up the car and transports it, organizes charity car auctions and distributes the profits to different non-profit organizations that use these money to help different categories of disadvantaged people. A car donations center will accept any type of vehicle from cars to RVs and trucks, regardless of how old and used they are. Many car donation centers allow you to donate cars that don't run anymore or that need extensive amounts of repairing. Accepting car donations and turning them into money can be too costly for small charities. That is why many charities are collaborating with a larger car donation center that can cover many of the expenses such as transport and storage of the donated car.

Why should I trust a car donation center to deliver my donation to the charity I want?

First of all, you shouldn't trust a car donation center without checking it out. Because there are many cases of fraud taking place nowadays, you should check the credentials of the car donation center and see the list of charities that benefit from the auctions organized by the car donation center. You can check the charities supported by the card donation center by calling the IRS Customer Account Services division for Tax Exempt and Government Entities or see the IRS Publication 78, Cumulative List of Organizations, where you can find almost all charities in the United States.

You should always check how much of the profit of the charity auction is kept as a fee by the car donation center and how much money actually go to the charity organizations. If the car donation center keeps more than 50% of the profit, you should think about contacting another car donation center.