Log InJoin 

How To Donate A Car To Goodwill

How To Donate A Car To Goodwill

There are a number of benefits when donating a car to Goodwill. Not only does it allow you to give back to the local community but you can also receive a tax benefit by making a charitable donation to a qualifying organization. Fortunately, there is nothing particularly complicated about donating a vehicle to Goodwill. It helps to understand the basics and follow the steps outlined below to ensure a smooth transfer from owner to business.

Step 1 - Car Value

In order to benefit from a car donation you will need to determine the fair market value of the vehicle and apply this figure as an itemized deduction on your personal tax return. Using various online resources like KBB.com and Edmunds.com, you can come up with an appropriate and legal value. Keep in mind, if the vehicle is in poor condition it may not qualify as a donation or be accepted by Goodwill. The vehicle must be in proper working order and documentation must be provided that it has been received by the qualifying organization

Step 2 - Contact Goodwill

Using the online website Goodwill.org, locate a local Goodwill office and ask whether or not they accept vehicle donations. If they do, ask for specific information about where to make a donation or if they offer a free pickup service. Provide any additional information about mileage, maintenance, repairs and overall condition so they are aware of what type of vehicle is being donated. They will most likely ask you additional contact information if there since there may be additional paperwork they need to prepare to receive the donation.

Step 3 - Make Delivery

When delivering a vehicle for donation to Goodwill, remember to bring the car title to facilitate transfer of ownership between legal entities, namely yourself and Goodwill. Tax laws regarding vehicle donations changed in 2005 so the process may be slightly different than you may be used to. If the donated vehicle is to be sold at auction then a tax receipt will not be provided until the sale is finalized. If the vehicle is sold then the fair market value is no longer used and the final sale price is what will appear as the charitable contribution value for tax purposes. If the vehicle is donated instead, then the fair market value will apply and a tax receipt will be received no more than 30 days after the donation.

Step 4 - Closing Down

A number of aspects must be reconciled after donating a car to Goodwill primarily due to the transfer of ownership. Be sure to contact your local Department of Motor Vehicles and cancel the existing registration. You may be required to turn over the vehicle license plates to the DMV after the registration is canceled. Also contact your auto insurance company and either cancel the vehicle policy or have the vehicle removed from your existing policy.

Additional Information

Donating a car to Goodwill is by no means a complicated process but it does require an understanding of charitable contributions and their tax implications. If you're still unsure about how to handle a vehicle donation, contact an accountant, financial advisor or tax attorney for additional information. Tax professionals will better understand your vehicle donation and tax needs and answer any relevant questions regarding the donation process.