Vehicle donation is a practice prevalent in the US, and some other countries, wherein you can give away your old vehicle or any unwanted car to charitable institutions and get a tax benefit on it. It is a great venture that helps the needy to get vehicles and is beneficial for the individual too as he gets tax deductions on it. Let us find out all that there is to know about vehicle donation in the U.S.:

1. Get a tax deduction

Vehicle donation is an easy and fast way to dispose of an old car as donors only need to fill in the donation form and fulfill specific post-donation requirements to be able to get tax benefits. It includes itemizing the tax returns and also getting a written acknowledgment on the subsequent sale of the car. If the vehicle is less than $500, then the value of the car during the sale is based on the owner’s estimate, even if the charity gets less money from the sale. However, if the car is valued at more than $500, then the car is usually sold through an auction. For such vehicles, the taxpayer needs to attach the charity’s written acknowledgment to the tax return.

2. Organizations who take donations

In the US, a vehicle can be donated to an NGO, high organized and professional-grade institutes, local charities as well as scrap yards, tow-truck companies, salvagers, and haulers. All these organizations have programs that support a charity. Charities tend to benefit from this as they get used cars that are in working condition for their volunteers and also for areas that need help. Some of these institutions have their own car lots that sell the donated cars while others have their donations going through auto auction companies. Many of these processing companies also collect and sell donated cars and give the money to a charity of the donor’s choosing. The company takes a commission for the sale.

3. Simple steps for vehicle donation

• Choose the non-profit organization you want to donate the vehicle to. There is an entire list of NGOs you can choose from.
• Complete the online vehicle donation form. Usually, the organization that you are planning to donate to helps out with the donation form details, in case you have any doubts or queries.
• Once these formalities are completed, a towing agent from the organization will contact you to pick up the vehicle as per your convenience.
• The vehicle will be sold to benefit the charity you select, usually at an auction or to a parts/salvage dealer if it is obsolete.
• For the tax returns, you need to complete some additional formalities, but these are simple and quick.
• The proceeds from the sale are sent to the charity and your tax return ready letter is sent to you by the concerned charity.

Next time you have an old vehicle you aren’t using, consider vehicle donation as it will surely benefit the needy and also offer you significant tax benefits.