There can be several things that you can do with your old vehicle, such as trading or selling it to other buyers. Donating a car in Maryland, however, is something absolutely more significant that can be done with it. Car donations to a charity can be helpful in availing several rewards including tax benefits. If you are donating a car in Maryland, you should make sure that the charity you choose accepts car donations since there are many small charities in the state that cannot afford expenses related to such donations.
Factually, deciding on the best organization requires you to conduct a bit of research both online and offline. Using several websites, such as Charity Navigator can turn out to be an effective way to get adequate information about the best charities in your area and choose the one based on your preference and organization’s goals. This website may also provide you with useful breakdown of the amount each charity is likely to spend as overhead expense. Such type of information usually helps you have an idea of the exact amount of your donation that will reach to the needy and decide on your favorite organization accordingly.
Since nobody wants the middleman to use a large portion of their donation instead of giving away it to deserving ones, it is critically important to know how much of your money is gone in term of overhead expense. This will need you to determine the same even before you donate your car to any charity. The best way to investigate a charity is to check it out on the official website of the IRS and carefully go through the Publication 78.
It might be worth mentioning here that you can funnel more funds to an organization if you take the car right to their donation on your own expense. As the matter of fact, most organizations accepting car donations have to pay a car towing company to bring the vehicle to their donations area. Your little effort can save them on the money which can be better spent on those underprivileged people the organization works for.
Obtaining Tax Benefits on Car Donations in Maryland
Apart for helping someone else in need, donating a car in Maryland can certainly get you desired tax benefits. This however calls for a few careful steps that must be taken at the right time when sending your used vehicle to a charity. If you think your car could be sold for above $500.00, ask the organization to provide you with the sale or auction receipt. The most important reason for why the ISR investigate car donations in the state is that many donors claim more than aforementioned amount based on their assumption which often lead to failure in obtaining the required tax deductions. Therefore, it is always necessary to get a receipt as the evidence when filing a tax claim on your car donation.
In the event where a car is not even valued at $500, donors should know its Fair Market Value using the Kelly Blue Book and still get a receipt from the charity they donated their car to. Car donation tax deductions require filling out a form known as IRS Form 8283 which will be added to your taxes if your car is auctioned for over $500.00. Also, you will be required to change the car’s title in the name of organization you are donating the car to as this will save you from any liabilities if the car is used in any criminal activity. Never donate a car to a charity that demands you to provide blank title for your vehicle.
Other benefits of Donating a Car in Maryland
Car donations to a charitable organization not only benefit a worthy cause but can also be advantageous to you in many ways. Let’s discuss what else is positive about donating a car in Maryland.
- Feeling of a Supporting a Good Cause – No matter what form you choose to contribute to charity, the act of donating your belonging itself is one of the best feelings you can ever have in life. Similarly, donating a car in Maryland is a reward itself since you are going to help someone in a way that is significantly meaningful. It can really go in a long way to help a charitable organization fulfill their goals, vision and mission without going over their limited budget.
- Storage Availability: A vehicle that is no longer in use or functional only consumes unnecessary space in your driveway, garage or yard. This space could be utilized for other things, such as storing important stuff, creating a small garden, or even for parking a new car. Donating a car in Maryland for a good cause can meaningfully help you in this regard too so you are able to get rid of clutter and increase your storage area.
- Save on Unnecessary Expenses of Car Maintenance: When you have a car even if you are no more using it can cost you some money for various things, such as renewing auto registrations, paying vehicle annual taxes, and keeping the car inspections and maintenance updated to ensure its finest drivability and performance. Of course, all these matters require you to invest a good amount of money for something that you do not plan to use. Nothing is going to work as a better option to save on these entire unnecessary expenses than donating your old car to charity. Just think of the benefits you will get other than saving on money in return for your car donation. There won’t be any need to maintain your old vehicle, compromise on a storage space. Most importantly, you can contribute somewhat huge to make the world a better environment for underprivileged people by giving away your unused vehicle.
It may be surprising for you but donating a car in Maryland can bring you deductible tax benefits that are equal to the price your car was auctioned or sold for by the charity. If your favorite charity chooses to use your donated car in a tax-defined way instead of selling it, you can still receive tax benefits which will be based on the current fair market value of your vehicle. It is possible to obtain the same by using Kelly Blue Book Value to determine the estimated value of your donated vehicle.