How to Donate a Car in New York: A Step-by-Step Guide
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Vehicle donations are a great way to support charities and draw benefits from tax deductions. However, donating a car isn't quite the same as writing a $50 check to a charitable organization. Donating a vehicle to charity can be a complicated process, and it's not always the same in every state. If you want to donate a car in New York, we've broken down the donation process here to help you maximize the benefits.
Research Qualified Charities for Your Donation
Not every charity may be eligible for a vehicle as a charitable contribution. Qualified New York charities are properly registered with the state and have filed financial reports with the Attorney General. They must also be a 501(c)(3) nonprofit organization.
To see if a charity is eligible in New York, you can search the Office of the New York State Attorney General's (OAG) Charities Bureau Registry. To verify a charity is a nonprofit, use the Tax Exempt Organization tool on the IRS website.
Prepare Your Vehicle for Donation
Charities won't accept just any vehicle for car donation in New York. To take advantage of a vehicle donation program, your car should still be in good shape.
Make Necessary Repairs and Clean the Car
Your car doesn't have to be brand new, of course, but a charitable organization isn't going to accept a car that will be a burden rather than a gift. If your car is in need of major repairs or is non-operational, you can't donate it.
Before going through the donation process, make sure your car is in good running condition and take the time to wash and clean both the exterior and interior. The latter is more of a nice gesture, but it's not very charitable to make a nonprofit clean out your car.
Gather Important Documents
When you donate a car in New York, you'll need to show proper documentation of the vehicle. This includes the vehicle title, registration, and maintenance records. You'll have to apply for a title transfer before donating the vehicle and remove your vehicle's license plates. Any certified charity can guide you through this process.
If you don't have or can't find the title, contact the New York Department of Motor Vehicles to request a title replacement.
Understand Tax Benefits Before Donating
One of the main reasons why many people donate cars to charity is because of the tax benefits. However, donating a car is more involved than simply giving cash to a charity. In order to maximize the tax benefits, you'll need to handle the process properly.
Assess Your Car's Fair Market Value
The IRS allows you to take a tax deduction on the fair market value of your donated vehicle. So long as you have a tax receipt, you can write off the sale price of the vehicle on your tax returns.
Regardless of the type of vehicle, you can use a pricing guide like the Kelley Blue Book or National Auto Dealers Assocation (NADA) Used Car Guide to determine the fair market value.
Learn About the Deduction Forms Required
After you've donated your vehicle, you'll receive a tax-deductible donation receipt in the mail. This receipt details the sale price of your car, providing you with the true fair market value. If your car is valued at more than $500, you'll receive an IRS Form 1098-C to claim the deduction on your tax return.
Familiarize Yourself with New York-Specific Regulations
The state of New York has a tax credit program that allows you to receive both a deduction and a credit on your state personal income tax return. Work with your tax accountant or agency to make sure you're getting both of these benefits and not accidentally over- or under-claiming.
Protect Yourself From Liabilities and Scams
Don't be taken advantage of as a vehicle donor. Cars are valuable commodities. As such, it's not particularly surprising that many scammers pose as charities to gain ownership of your car and then sell it for a profit. Always take the time to research any organization using New York car donation research tools. Look up eligible organizations through the New York State Attorney General's (OAG) Charities Bureau Registry or the IRS's Tax-Exempt Organizations search tool.
Beyond that, don't be afraid to ask questions. Any organization should be able to tell you what they plan to do with your car and how they'll use the money generated from the sale.
Ready to Donate Your Car in New York? Get a Free Car Insurance Quote Today!
Any vehicle owner in the Empire State needs New York car insurance. In fact, you need car insurance to get the title to your vehicle in the first place! Whether you're unsatisfied with your current insurance or you need to get insurance for a new vehicle, use EverQuote's comparison tools to find the best insurance company and policy for your needs. You can compare quotes and coverages in real-time to ensure you get the best insurance for your vehicle and your budget.