Do you possess a car with expired registration or lost title? And do you want to donate that car? So, don’t worry, here is a complete guide about how to donate a car with an expired registration, and we promise you will be an expert by the end.
Donating a car is far better than selling it as scrap. Donation is a noble cause, plus it helps you save a lot on taxes. So, let’s begin our guide!
Can you donate a car with expired registration?
And the answer is yes.
You do not need an active registration to donate a car. But all you need to donate your car is a title from the last registered owner.
If you have lost your car’s title, the Department of Motor Vehicles can help you get a duplicate one. But the catch here is you may be required to pay the registration charges from the date of expiry to the donation.
Lastly, please do not confuse the title with registration. Your car needs a title, NOT a registration.
What is the process of donating a car?
The process of donating a car consists of four legs.
- Find a charity that needs the car
- Fulfill the requirements of IRS
- Fulfill your state’s DMV requirements
- Cancel your auto insurance
#1: Finding a charity
DMV recommends that please confirm if the charity or cause is legitimate. But the question is, how would you go about doing so?
- Check if the charity is a registered automobile dealer. And if not a dealer, then ask the charity what they will do with the vehicle. And how the car will help them.
- You will need to transfer your title. So, do ask what name to fill in the new owner section of the title certificate. Do not let it stay blank, and do not entertain charities that ask you to leave it empty.
- Also, ask who will come to pick up the car. And confirm the identity before handing over your car to him.
- Check if the charity is registered/regulated or not.
Check everything twice and if you are not sure, keep moving down the list.
#2: Fulfill requirements of IRS
IRS or Internal Revenue Services allow you tax deductions on your donation. But you need to fill certain forms to avail the deduction. So, here is the whole process.
- Find out the amount the charity sold your car for.
- Also, determine the fair market value of your car. Just grab a copy of the Kelley Blue Book or some internet resource for arriving at an approximate value.
- Claim your deduction on Schedule A. There are two ways to claim your tax benefit, either by standard deduction or if you itemize.
- Finally, you got to do some more form filling. You do not need any extra paperwork if your deduction is or less than $500. Otherwise, if your deduction is between $501 to $5000, fill form Section A of form 8283 or form 1098-c. And if even greater than $5000, fill form Section B or 1098-c.
- Keep documentation of your donation. You must at least have a document that states your name, the vehicle number, the donation date, and any other goods and services you must have received.
#3: Fulfill your state’s DMV requirements
DMV has no requirements except that you must have a title. If you do not have a title, get a duplicate one from DMV. This title needs to be transferred to the new owner. Also, the new owner will need to register the vehicle in his name.
Also, you do not need to inform DMV while donating your car. But, DMV suggests the following when you decide to donate your vehicle:
- Remove the registration sticker and documents, vehicle plates, inspection stickers, insurance ID card, and any other personal property you have in it.
- Complete the title certificate and any other form you may need to transfer the ownership.
- Have a copy of all documents, brochures, receipts, and even advertisements related to charity and the donation.
- Verify the person who comes to take the car. Make sure he is the same person identified by the charity.
#4: Cancel your auto insurance
You are liable for any instance only till you are the owner of the car. Thus, you can cancel the car’s insurance as soon as the vehicle’s title is transferred.
We understand this is a complex process and includes paperwork. Thus, NGOs like donateacartocharity.com and veterancardonations.org are a great way to donate your cars. They do all the paperwork and pick up your vehicle from anywhere nationwide. They are IRS approved 501(c)3 charities, so you do not have to worry about whether your donation will be tax-deductible or not.
How does tax deduction work when you donate a car for charity?
When you donate your car to the car donation program of a registered 501(c)3 non-profit organization, you are eligible for a tax deduction.
Let’s see how much tax deduction you get in different cases:
#1: If the car sells for less than $500:
If the vehicle sells for less than $500, then you can either claim the fair market value or the amount your car was sold, if it was less than the FMV.
#2: If your car sells for more than $500:
If the vehicle sells for more than $500, you can claim the exact amount your car was sold for as a deduction.
What forms do you need to fill for the availing of the tax deduction?
Different forms are available depending on the selling price of the car.
- No extra paperwork is required if your car sells for less than $500.
- If your car sells for more than $500, you can avail of your vehicle’s exact selling amount by filling either a 1098-c or 8382 form. 1098-c form comes exclusively for motor vehicles, whereas 8283 form is generally for any property. You can use both of these forms for car donation.
- You can fill out any of the above two forms for a tax deduction. If your selling amount is within the bracket of $500 to $5000, fill the Section A of 8283 form or 1098-c.
- And if your selling amount is more than $5000, fill out Section B of 8283 form or 1098-c. Since the amount is high, you will also need a written appraisal in this case.
How to avail of your tax deduction after your car donation?
With the advent of various IRS registered NGOs’ car donation programs, getting your tax deduction is a cakewalk. Let’s see a few simple steps.
- Contact an NGO and fill out their online form or give them a call.
- Keep your title to the car ready. If you have lost it, the NGO may help you get a duplicate one.
- After you have donated, ask for a receipt. Most NGOs send you your receipt automatically.
- Keep your receipt safe for the tax filing. And when you do file your taxes, attach the 1098-c or 8283 form with the return. And congratulations, you will receive your tax credit.
Is there a deadline for donating your car?
Yes, there is! You need to complete the process by 31st December at midnight if you want to avail of the current fiscal year’s tax credit.
But that does not mean calling an NGO at the 11:59 pm would do. You need to obtain a title in your mail or post before 31st December to be in the safe zone.
Frequently Asked Questions about donating a car
So, after going through the theory, here are some of the frequently asked questions.
#1: Can I donate a car that does not run?
Yes, definitely you can. Often, the first reason people want to donate a car is that the vehicle needs major mechanical fixes. And they do not want to spend on it.
So, what do the charities do if it? They usually sell them at the auction or the salvage and take the money. Although not all charities pick up such cars, keep searching for one until you find it.
#2: Can I get the Fair Market Value for my car?
Although you mostly get the selling price as a deduction, you can still get the Fair Market Value as a deduction. It is not entirely impossible, you see.
You can claim FMV if:
- The charity does significant changes (except cleaning or trivial modifications) to sell it at a higher price.
- Or the charity uses your vehicle in their own work.
- Or the charity re-donates the vehicle at a low price to the needy.
In all these cases, there are chances that you get the FMV of your vehicle. We say chances because there are many other clauses before you arrive at the goal.
Thus, it is advised that if you have a very high-end vehicle for donation, you ask the charity specifically that do they take vehicles at their FMV. And if they do, what are the requirements, and will your car qualify?
For it is better to be sure than sorry.
#3: Is the tax deduction you get useful?
Well, the answer depends on many factors—your income bracket, the amount of tax deduction on the donation, etc.
But, in general, there are two ways to claim the tax benefit. The first is standard deduction, and the second is to itemize. Now, if you file for the standard deduction, it would not be much of a help, but if you itemize, then it will lower your taxable income. And thus be of greater benefit.
#4: Which types of vehicles can I donate?
You can donate any vehicle types like cars, vans, trucks, RVs, ATVs, motorcycles, and boats, etc. As long as it is a vehicle, you can donate it.
What is better, donating a car or selling it?
The choice between donating or selling your car is simple. The whole issue just boils down to one thing. Whether you will like a tax benefit or cash in lieu of your vehicle, if you instead prefer a tax benefit, go for donation; otherwise, sell it.
Another issue to resolve here is whether you will instead spend fixing your car or just donating it.
A plus point of donating your car is you do not have to spend on cleaning and other mechanical fixes. And lastly, a donation is a noble cause. It will make somebody’s wish come true or help a needy.
The ultimate choice is anyway yours.
In conclusion, donating your car is a noble cause, plus you get rewarded for it.
Now, speaking of whether you need a registration? Then you do not need it. But just a title. That too, if lost, you can get a duplicate one from DMV.
Also, the task of donating your car is simple, with the biggest and most important job is choosing a charity. Once you have found the cause you want to help, you need an NGO with a car donation program. They will handle all the paperwork and towing hassles. You just need to make sure you get the receipt.
Attach this receipt and 1098-c form or form 8283 with your federal tax return. And voila! You will receive your tax credit according to the selling price on the receipt.
Just remember to complete the donation task before 31st December at midnight.
Donating is an excellent decision if you are feeling altruistic or/and do not want to spend time and money fixing and repairing the car.
So, this was all in our guide about whether you can donate a car with expired registration or not. We hope you liked it and found it useful. If you have any doubts still buzzing in your mind, please drop them below in the comments section. We will be glad to answer them.