Donating your car to charity can not only be beneficial to the less fortunate, but also to yourself as well! Donating a car can earn you a tax write-off, and if you donate to an eligible charity, you’ll also receive an income tax deduction of around $500, depending on your tax bracket. Here’s how to donate a car in California in just 5 simple steps!
The three most common misconceptions about donating a car
People often believe they have to be a resident of California, or that they need proof of ownership before donating their car. In fact, you can donate your car no matter where you live in the U.S., and all that’s required is a vehicle identification number (VIN). In order to be eligible for donation, your car must also pass an inspection; most charities will only accept cars that are less than 10 years old and free from serious mechanical issues like engine damage or frame rot. Once it passes inspection, make sure you keep proof of donation with you at all times – state law requires it!
So how do you donate your car?
When most people hear that they can donate their car, they automatically think of charities like Goodwill or Veterans Aid. While these are great options, donating your car is not as simple as dropping it off at a donation center and walking away. The truth is that when you donate your car there are some very important steps you need to take first. Here’s what you need to know about donating your car in California.
Step 1) Prepare the car donation
Make sure your car is ready for donation. The last thing you want is to be turned away from a charity because your car isn’t safe or clean enough. You should wash it, make sure there are no dents or other structural damage, and fix any broken equipment (check the organization’s guidelines). Also, check that you have all of your paperwork in order—donation paperwork can sometimes be complicated, and make sure you keep copies of everything.
Step 2) Call Donate a Car Now
The first step is finding a local car donation program. There are tons of them out there, but a good place to start is with one of your local charities. Once you’ve identified a group you want to help (maybe Habitat for Humanity or Toys for Tots) call up and ask if they accept vehicle donations—and, if so, how they like them delivered. Also ask what’s expected of donors, as some organizations require tax receipts while others are willing to accept personal identification letters and donor-appreciation gifts.
Step 3) Wait for the tow truck to pick up your car.
While you don’t necessarily have to be present when your car is towed, you may be required to provide a written letter authorizing its removal. The amount of time your car will be at the tow yard depends on whether or not it has been claimed by another party. If not, expect a few days; otherwise, it could remain there for up to 90 days (in some states). It’s important that you keep any receipts associated with its release so that you can fill them with your taxes at year-end. Even if your old car wasn’t turned into scrap metal and crushed for parts, there are tax breaks available if it went through a formal donation process.
Step 4) Get Your Tax Receipt
According to Giving USA, Americans gave more than $335 billion to charity in 2014. If you plan on taking a tax deduction for your donation, be sure you have a receipt from your charitable organization and that it includes these details: when and where you donated, who you made your donation to (and their tax ID number), how much you donated, and what items or property was given. Without a receipt, there’s no tax deduction! You may also want to use an online tool like TurboTax or CCH TaxConnections® Plus Software with TaxCut Premium Federal State E-File so that as soon as you make your donation, it can be included in next year’s taxes.
Section 5) Sell Your Junk Car for Cash
Got an old, beat-up clunker that you’ve been planning on selling? If so, it’s probably worth getting some cash for. However, if you don’t have time to do all of the legwork yourself, or your car isn’t running, donating it is a great alternative. It allows you to get rid of an eyesore and raise money for a good cause. In some cases, you can even write off your donation at tax time! Use these simple steps for donating a car with confidence. You can also click here for more information about how it works!