Why Donating Your Old Car Is The Smartest Way To Claim A Massive Tax Break

If you’ve just bought a new car and have the old one sitting around, donating it can be a really good idea. Not only will you help a charity, you get a tax deduction for yourself too. You can also donate boats, RVs, trucks or motorcycles if you have those.

What do they do with the car?

The Salvation Army sells on your car, and the proceeds go to help Army programs in your area. While some critics argue that car donation is more about avoiding tax, and others argue that the ‘middleman’ gets a cut of the profit, by donating your car you are still helping a charity and your local community.

The process

You can call the Salvation Army and they will pick up your car. When they collect the car you’ll be given a tax-deductible receipt for the IRS. You’ll also need to note down the number on your car’s odometer at this point. Any other info will follow on after the car is sold. Online pickup is available in certain states: Arizona, California, Colorado, Hawaii, Oregon and Washington. Make sure your car is clean – it’s just polite!

Rules and regulations

The IRS has strict regulations on donating a car. Make sure you check these first. When it comes to filing your taxes, you’ll want schedule A of form 1040, and form 1098-C. Make sure you only use the price the car was sold for – this is what the IRS allows.

Other charities

It is also possible to donate your car to other charities. Look online if you want more ideas of non-profit organisations that can benefit from your car donation.