There are lots of charities out there vying for your car. Some have made it so simple — all it takes is a phone call.
But how can you be sure that you and the charity are getting the most value out of your donation?
Charity Watch President Daniel Borchoff said everything comes down to the resale price.
"You may think your car is worth five grand in your mind, but if they can only get a thousand for it that's the tax deductible portion," he said.
Otherwise, you can claim a deduction of $500. If the charity sells it for more you would be entitled to a deduction for that amount. Anything over $5,000 and you'll need to get an appraiser to verify the worth.
There's also the work of choosing the charity.
Borchoff said donating to a charity that will use the vehicle in its operations or give it to someone in need, will allow to to deduct fair market value.
"Look for charities like Meals on Wheels or a senior home, or a non-profit vocational school that teach people how to work on cars," he said.
If that's not possible look for a charity with high marks for efficiency in spending through sites like Charity Watch or BBB Wise Giving Alliance .
In its tips for donating , Charitywatch also suggests:
- Ask to donate the car directly to the charity with no middle man. That will mean no money spent on towing and more money directly for the charity.
- Make sure to get a copy of the organization's IRS letter of determination, to verify their eligibility to receive tax exempt donations.
- Borchoff also recommends checking how much of the money the charity will really get after paying the tow company and any other third party vendors.
"Because they cut deals where the charity gets very little... maybe like 10 percent 20 percent," Borchoff said.
Charity Watch said non-monetary donations can trigger IRS audits so make sure to keep those receipts and proof of what you put into the vehicle.
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