Congratulations on your new car! If you weren’t able to trade in your old car and you don’t want the hassle of trying to sell your car privately, consider donating it.
Auto donation is a great way to get an unused vehicle out of your driveway and save you money when you file your income taxes.
There are hundreds of non-profit organizations (NPOs) accepting vehicle donations, including Newgate School, an automotive vocational school located in Minneapolis, MN. Although finding one that aligns with your personal values is important, there are practical matters to consider that, if mishandled, can wind up costing you time and money.
Before you round up your car’s title and arrange to haul it to your local NPO, here are five questions you should ask to make sure your car—and your finances—will be handled right.
Q1: Is My Donation Tax-Deductible?
In order to claim a deduction on your tax returns, a charitable organization must have 501(c)(3) tax-exempt status with the Internal Revenue Service. It’s important to note that an organization that may have once held this status with the IRS may have had it revoked; therefore, it’s vital to confirm that the organization has good standing as a tax-exempt non-profit, so you don’t lose your tax deduction.
The IRS has a tool you can use to verify a charitable organization’s status before making your donation. (https://www.irs.gov/newsroom/heres-how-taxpayers-can-check-if-their-charitable-donation-is-tax-deductible)
Q2: How is the Amount of My Tax Deduction Determined?
Non-profit organizations should be reasonably transparent about the way the amount of your tax deduction is determined. After all, you want to know that you’re getting the maximum value from your auto donation.
Newgate School has two ways to ensure you and the school get the most from your donation:
- The vehicle is used in one of the training programs and is then resold. The amount of your deduction will be the amount Newgate School receives from the sale of the car.
- The vehicle is reconditioned in the training programs and then donated to a working mother in need. Your deduction amount will be equal to the maximum fair market value allowed by the IRS.
Q3: Will You Accept My Car if It’s Not in Good Condition?
The last thing you want is to find a charity that you wish to donate your vehicle to, only to find out that they only accept cars that are running and nearly free of cosmetic issues. In many cases, it’s because the organization doesn’t have the personnel or funds to perform maintenance beyond detailing the car for sale. So, if your car has some significant dents and dings, is leaving suspicious puddles in the driveway, or won’t start, the non-profit organization may not accept your auto donation.
An automotive vocational program, such as the mechanic and auto body courses at Newgate School, will accept vehicles in nearly any condition. Newgate will accept your vehicle donation as long as any damage is repairable.
Q4: How is the Transfer Process Handled?
Although many charitable organizations are thin on personnel and other resources, it is reasonable to expect your donation process to require minimal work on your part.
To start with, you want to be sure that the non-profit organization will immediately transfer the vehicle title from you to the organization. If the title isn’t transferred and the car is involved in an incident, the authorities may pay you a visit if you’re still the owner of record. Newgate School is licensed by Minnesota Driver and Vehicle Services to process titles on-site, so you can say good-bye to your old car without any further obligation.
You’ll also want to find out if the non-profit organization will pick up your vehicle, especially if it isn’t running. If the charity is unable or unwilling to haul away your old car, you’ll have to decide if it’s worth it to you to pay to get the vehicle up and running or to have it towed to the donation site.
Q5: How Will Your Organization Use My Car?
Of course, getting a tax deduction is great: but you also want to feel confident that the charitable organization you’re donating to has a mission that aligns with your personal values. There is a lot of satisfaction in knowing you’re helping to make a difference in your community.
When Newgate School accepts vehicles for donation, you’re helping young at-risk men and women around the Twin Cities train for careers in the automotive industry. And with millions of cars on the road, there are many stable, well-paying jobs waiting for these students when they graduate. Your vehicle may also help a working single mother who needs reliable transportation to get to work and her children to school and daycare. This is a vital resource for these women, especially when the COVID-19 pandemic curtailed public transportation service across the country.
Asking the Right Questions Can Make Your Gift Do the Most Good
As you can see, there’s more to researching non-profit organizations than asking your favorite search engine where you can donate your car. Asking the right questions helps you maximize your tax deduction and make sure your charitable gift does the most good within your community.
Newgate School is a 501(c)(3) non-profit organization that gives disadvantaged young people in the Minneapolis-St. Paul area a lifeline to stability. Through vehicle donations, Newgate trains men and women for an automotive career, while helping students give back to the community by donating vehicles through the Wheels for Women program.
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