How to Donate a Car for Cash
It is possible to donate car for cash, though there are 2 main ways this is done. Most individuals look to donate a car to a charity and then receive a deduction when filing taxes. If the car is quite old, then it is possible to donate the car to a junkyard that will provide cash for the working parts of the vehicle. Additionally any nonworking parts can be melted down for metal, though this type of donation will not benefit a charity.
Many charities will accept vehicles as donations. It is important to ensure that the charity is certified as 501©3 by the IRS. It is only these certified charities through which it is possible to make a car donation for tax breaks on the vehicle. Most religious organizations, schools and veteran organizations are certified.
Before donating the vehicle it is necessary to have all of the proper documents. It is necessary to sign the title over to the charity. Do not leave this document blank but transfer the title to the charity. The charity can then transfer the title again to the recipient of the vehicle. If there is no title then see about obtaining a replacement from the department of motor vehicles.
3. Vehicle Pickup
Most charities will pick up the vehicle for free, though in order to ensure that the charity gets the most from the donation drop it off yourself. If the vehicle is being towed or picked up then make sure you are around as it will be necessary to obtain a receipt.
4. The Receipt
A receipt of the donation is required. It is no longer possible to just write the fair market value on the receipt. If the car is worth more than $500 see about getting a receipt once the charity has sold the car. They will provide you with the sale price within 30 days. If the vehicle is not worth more than $500 then just take this maximum deduction. A sales receipt is needed to deduct a value of more than $500.
5. Tax Deduction
When it is time to go about filing your taxes, it is necessary to itemize the deductions instead of taking the standard deduction. It is no longer possible to simply use the fair market value of the vehicle. If a sales receipt is not included then the maximum deduction is $500. Determine what is best before donating the car to ensure the car donation cash back is as much as possible.
If the vehicle is quite a clunker then even a charity may not accept it. However several will accept these vehicles and then have them dismantled and can still get cash. It is possible for you to do it yourself, though you can still get the same amount of money by claiming it on taxes rather than accepting it from the junkyard.
Beware of scams and intermediary companies. Many companies will help find a charity for you and then take care of the vehicle. But this intermediary company will take a large cut of the proceeds from the car sale so the charity does not get much.