How to Donate Cars to Goodwill

First, you must determine the car's "private party" value. You can do this by visiting Edmunds.com or KBB.com and entering in the details for your vehicle, including the make and model. This information is important for Goodwill, and you will need it later when filing your income taxes.

Next, you need to locate your local Goodwill charity by using the locator tool on its website. Keep in mind that not all Goodwill locations accept vehicle donations, so it is important to check.

Once you have located your local branch, contact them and let them know you plan to donate your vehicle. They will give you any location-specific advice and will set up a time for the donation. Some Goodwill locations offer free pickup, but be sure to check to see if your location offers this service. They will probably inquire about the car's mileage and the title and may ask you to fill out a brief form with your contact information.

You must have the title for the car in hand, and you cannot donate a car that still has a lien on it from the bank. You must sign over the title to Goodwill before you donate the car.

The next step is to deliver the car to Goodwill. The process for claiming a tax deduction for a donated vehicle changed in 2005, and the new process determines when you will receive a receipt. If Goodwill plans to sell the car at auction, you will not receive a tax receipt right away. Rather, Goodwill will send you the tax receipt within 30 days after the sale. In this scenario, you can only deduct the actual selling price of the car, not the estimated market value. However, if Goodwill gives the car to a needy family instead of selling it, you will receive a tax receipt no more than 30 days after your donation and you can deduct the market value on your taxes.

Shortly after donating your car, you should cancel the insurance with your insurance company and cancel the registration at the DMV. Some DMVs will require you to turn over your license plates when you cancel the registration.

If you have any questions about donating a car or how to deduct it on your taxes, contact your accountant or financial adviser. They can determine that you receive the necessary paperwork and claim the proper deductions.