If you have an old junk car, you may have thought about donating it to charity. There are many organizations that will take your car, truck, or motorcycle, running or not, as a donation. They will also claim that your donation will be tax deductible. However, before you decide to donate an extra or unwanted vehicle, there are a few things you should understand. The following are three of them.

It needs to be a qualified charity for your donation to be deductible

This simply means that it has been recognized by the Internal Revenue Service and, therefore, has tax-exempt status. These charities are also referred to as 501(c)(3) organizations. If the organization is not a qualified charity, you will not be able to use your car donation as a deduction on your income taxes. If you have any doubts about the organization you are thinking about donating to, you can contact the IRS to find out the charity's status.

The tax deduction may be less than the cash value of the car

In general, the deduction you are able to take for your donation will be based upon the amount the charity is able to sell the car for. This may be different than the current value of your car. A charity may not receive the upper limit on the value of the vehicle because they may not have the ability to get the best price. After all, they are a non-profit company. Of course, this will seldom be an issue if you're donating a junk car. A charity will likely sell it to a junk car buyer for approximately the same price you would get when selling it in the same manner.

The tax deduction may not affect your taxes

Unless you itemize your deductions, there will be no way to write off your donation. This is important for anyone who takes the standard deduction on their income tax return. Unless you have a total amount of deductions that is greater than the standard deduction for your filing status, it doesn't makes sense to itemize, so the there will be no tax benefit for the donation. Of course, if you believe in the charity, it may not matter that you cannot take the deduction come tax time. This is still a good way to donate, and you won't have to spend your time selling the car.

There are many motivations for donating to charities, but if one of them for you is a tax deduction, you need to keep the three points above in mind. Of course, you should always consult your accountant with any specific questions regarding deductions for car donations.