Once you’ve come to terms with the fact that your old car isn’t going anywhere anymore, what should you do with your damaged car?
Now you can consider car donation for a tax credit or you can junk your car. Both choices have pros and cons, so it's important to do your research before you donate your car and say goodbye.
The maximum you can get with a car donation for a tax write-off is $500, and often it is less than that. You may be able to get significantly more for your car if you sell it rather than donating.
We can give you a market-value offer for your damaged or used car, and it’s often the best option for you! Sell your car to us and get a guaranteed offer, fast. Find out how much your car is really worth now!
Like any big decision in life, getting rid of an old car will take a bit of special planning. If you decide to junk your car, the team at CarBrain would be happy to take it off your hands.
With our easy to use online cash value offer system, we make junking your car simple and quick. But before you decide, it’s a good idea to examine the benefits of both car donation to charity and trading it in for cash.
Donating a car to charity starts with your decision to get rid of your junk car. Maybe you're looking for free junk car removal, or have a favorite charity you'd like to support.
Whatever your reasons may be you will have to figure out where to donate a car and how to donate a car.
This means that cars that can't be driven due to mechanical or collision issues will typically be accepted, so if you need to donate a junk car, you're in luck.
If you are looking into vehicle donation to receive a tax credit or benefit, this could be a good choice for you. However, to qualify for a charitable tax deduction, you have to follow strict IRS guidelines, including:
You must first confirm that the organization you will be donating to is a qualified charity. Typically, these include 501(c)(3) organizations that focus on educational or assistance-based programs. Many religious organizations may count as well but if you aren’t sure, check with the IRS before you donate.
Don’t forget to find out the value of your old car. This means that you must determine what the fair market value of the vehicle is before you donate. If the car is a junker, it will probably be worth less than $5,000, which means you can use the Kelley Blue Book, Hearst Black Book or NADA to determine the value.
You must itemize your tax deduction on Schedule A of your 1040 tax forms. But be sure to keep in mind that your total deductions cannot be equal to, or more than half of your adjusted gross income.
If you want to collect your tax exemption, you need to have paperwork to prove you’ve donated and your deduction is worth at least $250. You don’t have to send this in with your taxes but should keep it on file in case the IRS asks for proof.
It's important that you work with reputable car donation charities when consider car donations near you.
The best place to donate a car to charity may differ based on your location, and free car donation pickup is also a major factor.
All charities have the same limit with a car donation for a tax write off though, so you will probably see the same tax benefits with all of them.
Most of these charitable organizations are charities that accept car donations directly, and you may be able to make a car donation online.
If you're considering donating a car that doesn't run you should look at the following places:
Donate a car to Goodwill
Donate a car to Salvation Army
Donate a car to NPR
Donate a car to Make a Wish
When considering a car donation to NPR, Salvation Army, Goodwill or other respected charities, you’ll have to consider everything.
Important factors to consider with car donation for charity include whether or not the car charities will tow the car away for you, the total amount they spend on administration costs (15 percent or less is preferred) and whether or not the charity uses a third party to collect donations – which can take away a large chunk of the proceeds.
Since you can't really donate your car for cash, and rather the way the system works makes your car donation for a tax write off, you should consider selling your car.
While you won’t get the tax break from donating your damaged or old car, you may be able to enjoy financial benefits that you can put to good use.
When considering selling your car for cash, be sure to work with a reputable company that is willing to make a cash value offer and provides you with a clear pick-up timeline.
Depending on your circumstances, trading in your car for a cash value offer can be a great deal. Some of the other benefits of junking your old cars include:
Getting an emissions-polluting vehicle off the road. If your old car isn’t up to modern emissions standards, you can rest easy knowing that most junk car programs won’t be putting these types of vehicles back out on the highways.
You don’t have to worry about out-of-pocket costs. Nothing is worse than trying to do the charitable thing by donating your car, only to find that you have to pay to have it towed away. With CarBrain, once we’ve accepted your car, we’ll come to your home, place of work or wherever the vehicle is stored to tow it away for you. No hassle. No headaches. And no fees!
If you’re at a place where you’re going back and forth between donating your car or trading it in for cash, make sure to do the research first.
While donating a car can be beneficial for some, the hassle isn’t always worth it in the end. Want to to learn how to get the best offer for your damaged vehicle?
Click the get an offer button to get an offer and discover the benefits of our no-fee program.
Depending on the charity you choose to donate to, your vehicle's value and what the organization does with the vehicle, you could save on your taxes.
However, keep in mind that deductions do not work as a 1-to-1 reduction on your tax bill. Instead, it works as a reduction of your total income that's calculated for tax purposes.
For instance, if your income is $40,000 and you can deduct $2,000 from your taxes due to a donation, that does not mean your tax bill will be lowered by $2,000. Instead, it means your tax bill will be calculated on $38,000 worth of income rather than $40,000.
Additionally, calculating the specific value of your vehicle only matters if your total donations for the year exceed approximately $13,000, which is the standard deduction amount available to single tax filers (the standard deduction is $19,400 for heads of households and $25,900 for joint filers).