How to Donate a Car in Alabama

When you donate a car in Alabama, you can claim a federal tax deduction and up to an additional 5% Alabama state tax deduction.
Written by Tiffany Leung
Reviewed by Kathleen Flear
An easy way to dispose of an unused car is to donate it to charity. The bonus is that you can also claim tax deductions afterward. Find out where the best places to donate a car in
Alabama
are! 
It can be surprisingly difficult to get rid of an unused car—it can take a long time to sell a car online or through a third party, and you might not get the best value when you
trade it in
. It can be stressful to figure out how to say goodbye to your family car after it runs its last mile.
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How to donate a car in Alabama

The biggest advantage of donating your car is how convenient it is compared to selling it or trading it in. The process itself is straightforward to make it easy for donors to proceed with the process. Below are the general steps to get you started: 
  • Find the organization or charity you want to donate to. This step will be the most time-consuming, as you want to verify that the charity you choose is legit. After all, the car donation industry has become a major target for scammers. It's easiest to start by researching reputable organizations with a mission that aligns with your values. 
  • Check the Pub. 78 data using the IRS’s
    online search tool
    to verify that the organizations you choose can receive tax-deductible donations. 
  • Gather the required documents. At the very least, organizations will ask for a signed title. However, they may also require more information, such as the car’s
    make and model
    ,
    vehicle identification number (VIN)
    , and current mileage. 
  • Checking your car’s fair market value is an important step in determining your tax deduction. You can use
    Kelley Blue Book
    as a resource to find what the fair market value for your car is. 
  • Schedule a pickup. Once you’re ready to offload your car, you can schedule a pick-up time with your chosen organization. Depending on the organization, you may need to call or fill out a donation form.
  • Keep your receipt to claim your tax deduction. If your car gets sold by the organization, you will need to find out the sale price to determine the amount you can claim for tax deductions. 

How do taxes work when donating a car?

Another advantage that comes with donating your car is the
tax deduction
you can be eligible for. Since most organizations accepting car donations raise funds by selling your car, your tax deduction will be based on the sale price of your car after your donation
If the sale price was over $500, you can only deduct the sale price from your taxes, regardless of the fair market value. For example, if your car’s fair market value was $3,000 and the organization sold it for $1,000, you will only be eligible to deduct $1,000 from your taxes. 
If the sale price was under $500, you are eligible to claim either the fair market value or $500—whichever is less. In many cases, you will be able to claim a larger deduction since some charities will sell donated cars at a significant markdown to
families in need
.
If the organization keeps your car, you can deduct the fair market value. 
In Alabama, you will also be eligible for up to an additional 5% deduction from your Alabama state taxes.
Be mindful that you can only claim deductions if the organizations can receive tax-deductible donations. You may not be able to claim tax deductions if you make a car donation to other organizations, such as a trade school for mechanic training.
Key Takeaway: Always do thorough research to ensure the organization you want to donate to can accept tax-deductible donations.
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Where to donate a car in Alabama

If you’re not sure where you should start, we’ve found six of the best organizations to donate your car to in Alabama. 

Cars for Prostate Cancer

Cars for Prostate Cancer
makes it convenient for donors by handling all the DMV paperwork, including
lost car titles
and expired
registrations
. All their services are free, including same-day towing and providing professional bilingual staff. The organization will provide you with all the tax deduction documentation required by the IRS and you can check status updates online 24/7. 

Wheels For Wishes

The nationwide organization
Wheels For Wishes
raises funds through donated car sales to support the Make-A-Wish® Foundation in benefitting critically ill children.
Wheels For Wishes Alabama
accepts donations of cars and other vehicles from anywhere in the state, whether the car is working or not. Free
towing services
are offered for your convenience.

Goodwill

Goodwill donations aren’t just limited to clothing you no longer wear—they also accept car donations. Proceeds from
Goodwill Car Donations
go towards providing job training, employment services, and critical community-building services to disadvantaged individuals.  

Kars4Kids

Kars4Kids
is not only known for its catchy jingle on the radio but also uses proceeds from car donations to support youth with year-round programs. Donating to this organization is quick and easy—you only need to schedule a pick-up date and time and sign the title. Kars4Kids also offers a
vacation voucher
on top of maximizing the tax deduction you can claim. 

Vehicles for Veterans

If giving back to veterans who served our country is your top priority, look into donating your car to
Vehicles for Veterans
. Proceeds from car donation sales benefit disabled veterans by offering services that can assist and support them. Towing your car comes at no cost and they will take your car donation at your convenience. You also won’t need to worry about any paperwork and you will receive an IRS tax receipt.  

Cars2Charities

Cars2Charities
helps other non-profit organizations accept donations and handles all the work so that the organization can focus on its cause. Their mission is to make it easy for individuals to donate their cars to their favorite charity. This organization promises 25%-50% higher tax deduction claims by making your car look and run better.

How to find affordable car insurance quotes in Alabama

After donating your car, you may decide to eventually buy a new one. And when you do, you'll need to find
car insurance.
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