Diesel Performance Truck

posted by Diesel Performance Truck on Feb 10

? Verifying the Authenticity of a Supposedly Authorized Vehicle Donation Center

When one has a car that is a good candidate for automotive donation, there are very often time constraints that don’t allow for a great deal of shopping around for the most needy individuals in the community, much less, repairing and making that vehicle a useful donation. An authorized vehicle donation center, recognized by charitable organizations and the IRS, will be able to take care of your vehicle, find it’s best and most charitable use and give you a verifiable receipt for your tax forms.

But, how do you know your vehicle is being used for the charitable purposes the supposedly authorized vehicle donation center claims to support? There are several signs, especially when you’re looking online for such a service or responding to solicitation, that you’re dealing with a non-authorized vehicle donation center.

A quick check with even one or two of the charitable organizations (preferably ones you’ve heard of before) should yield an acknowledgement of the authorized vehicle donation center’s association as an agent of that charity. Any legitimately authorized vehicle donation center will be able to provide you with a list of charities it brokers deals for.

Though very few authorized vehicle donation centers are registered with the IRS as a 501 (c)(3) non-profit organization, the charity you donate to must be. Without this badge of approval from the tax authorities, you’ll not be allowed to legally take the deduction. Even worse, this can set you up for an audit and no one wants to mess with that kind of attention. A truly authorized vehicle donation center will be able to provide you with their tax ID number so you may check it on the IRS website.

Several states additionally certify authorized vehicle donation centers on their own. If your state is one of these, you can easily check with the state attorney general’s office to see if the donation center you’re considering is listed on the state non-profit rolls. If not, you may not be dealing with an authorized vehicle donation center at all.

The authorized vehicle donation center is most often, in fact, over 95% of the time, a for-profit venture. The donation center must follow certain rules of conduct with regards to how you may be enticed into vehicle donation. There is also a register of organizations that are not allowed to do business in the state.

One very important function of an authorized vehicle donation centers is helping you determine a fair donation value for your donated car, truck, boat or RV to be reported to the IRS. This is not the so-called “blue book” value but, instead, its value on the market. Bear in mind, this market may be wholesale rather than retail.

Most often, the value you’ll be given a receipt for is the value the charity ultimately receives for the car. If you don’t receive a receipt suitable for tax purposes right away, that’s o.k., but if you’ve not heard anything in a few months, you should start making phone calls to the authorized vehicle donation center’s offices. If the car is being repaired before sale, it could take awhile, though even authorized vehicle donation centers very rarely do that, preferring the wholesale and scrap methods.

This is especially true in the case of vehicles that are not currently running. However, there is still money to be made, and most legitimate and authorized vehicle donation centers will be happy to come and haul your old car, truck or boat away for free. You should be suspicious of any supposedly authorized vehicle donation center that would require you to pay for towing services and ask.

If the fair value of your car is less than $250, there is no reason to bother with a form of donation from your chosen charity or a third-party organization such as an authorized vehicle donation center. However, over that amount, you’ll need a receipt in writing. If more than $5,000 is received for your vehicle, you will require an additional form (Form 8283, section B) to be signed by a representative of the authorized vehicle donation center in question and an independent appraisal.

Though there are certainly charlatans out there who would take advantage of charitable giving to line their own pockets, the IRS and state governments take this very seriously. The state Attorney General’s office will have a list of known scammers to avoid. Once you know the authorized vehicle donation center you’ve chosen is on the up and up, you can donate with peace of mind.

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Auto Diesel/01_authorized vehicle donation center.txt

posted by Diesel Performance Truck on Feb 7

? Analyzing the Actual Net Benefit of an Auto Donation

When making an auto donation, whether a car, truck or RV, may not actually be in your best financial interest when straight economics are concerned. Of course, charitable giving is it’s own reward for many, but if you actually consult your accountant, you may not enjoy any additional incentive in the form of tax deduction, as is typically offered for most auto donations. Especially if your auto donation is worth more than $5,000, you should consider your actual benefit to accurately judge whether it’s wise to donate your vehicle.

For starters, when you file your return for that year, you’ll need to file with itemized deductions, rather than taking the standard deduction. This can work against you if you’ve not rolled much of your money back into living and working expenses. Typically, itemized benefits are most often used for the self-employed since so much of their income is reinvested back into their livelihoods in the form of expenses. A young person just entering the workforce as a low wage employee may find it difficult to account for enough expenses when figuring their taxes.

Also, you should consider the cost of hiring a tax accountant if you don’t want to bother with all the receipts and calculations. Though many people could save money from itemized deduction, often they are not interested in fussing with their returns. The price of some tax preparers is low enough that a large percentage of those in the US use them each year, with widely varying results.

Auto donation is also a type of charity giving that is motivated by your desire to see the charity in question, one with whom you presumably have a particular belief in, get as much of that donation as possible. Of course, the amount you are able to deduct from your taxes also differs. Both figures are dependent upon whether you want to give your auto donation to an online or third party organization.

By taking the time and effort to find a charity that can benefit from your auto donation, you can increase the percentage of your auto donation that will be given to the charity and your deduction. The downside is that this requires time and effort on your part. This is especially true of higher value auto donations.

Third-party donation organizations are able to offer services such as towing and a quick sale, though sometimes this sale is at a lower price than you could have gotten if you’d managed the sale yourself. The price one pays for this convenience is overhead for the third-party organization.

Some states, such as California, regulate how a third-party donation service operates, stipulating that certain amounts of the proceeds are given to specific purpose. Other states have similar laws and statues. Find out if any auto donation service is registered to practice in your state. Any complaints against an auto donation service should be on file with the state Attorney General’s office.

It is always wise to consider selling the car yourself rather than relying upon an auto donation service. Such services can consume nearly 70% of the sale price of the car in overhead costs. Even if you sell it quickly yourself, without repairing it for the sale, you can still expect far more of your donation to go to the charity you’re chosen. Often, one will contact the charity themselves with a cash donation after doing some research into the non-profit organization they’re interested in supporting.

In short, one should consider their motivations for any auto donation and balance that with their time constraints and personal financial gain in the form of a large charitable deduction on their taxes. Remember that deductions are taken off your taxable income, not the tax due. The relative worth of such a donation does depend upon your tax bracket.

All auto donations are appreciated and raise money for worthy causes, but there are great differences in the amount of relative value to you depending upon whether you conduct the donation yourself or use a third-party auto donation agency.
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Auto Diesel/02_Auto Donation.txt

posted by Diesel Performance Truck on Feb 4

? Using a Facilitating Service to Manage Auto Donations

There are many reasons people choose to use a facilitating or third-party service organization to manage their auto donations. Indeed, they are often very similar to the reason a given charity might use such a third-party agent for auto donations. When you’ve already got too much on your plate, it’s good to let a professional help out.

For consumers, it’s often a simple matter of wanting the vehicle gone because a new one has been purchased. Sometimes it is the inherent bother and expense of hauling it away that makes people turn to professionals to handle their auto donations.

Of course, there are financial and charitable benefits to conducting such transactions yourself, but all auto donations are good ones as far as receiving charities are concerned. Also, if using a service to manage your auto donations makes donation that much more likely, then such services serve a valid purpose. As of 2004, nearly 70% of legitimate charities (determined to be non-profit by the IRS) used third-party agencies to manage their auto donations, though a similar amount did take their own inquiry calls.

As common as the practice is, there are some things you want to take into consideration when choosing a service to manage your auto donations for you. For starters, you want to make sure the third-party management of auto donations actually benefits real charities. This is often accomplished by calling the state Attorney General’s office or the state Secretary of State.

A large majority (39 of 50 states in 2004) of states require third-party agencies that handle auto donations to register with the state. If the company you’re inquiring about isn’t on the rolls but is advertising their services in the state, an investigation will likely continue. Feel free to ask for a copy of the legitimate list if you’re confused. Many states carry this information online.

There are many types of charities that can benefit from auto donations. In addition to the typical non-profit organizations as recognized by the IRS, schools, local or state governments, childcare organizations and veterans groups, in addition to the federal government itself are all eligible. Not included as valid targets of auto donations are for-profit support groups, political groups or candidates, social clubs, co-ops, labour or agricultural groups, as well as just about any social group that isn’t covered by non-profit exemption.

Once you’ve chosen a charity and third-party agent for auto donations, you can get down to the business of actually sending the car off. When inquiring about your vehicle a determination will be made as to whether it’s worth the effort of picking it up. Though some charities will accept any vehicle, others are pickier about what they will or wont’ take, as some donations actually cost them money. Those who do take all auto donations usually do so in an effort to generally encourage their donation base.

Even if your auto donation does run under its own power, it will almost always be picked up by a tow truck for liability reasons. Whether the charity in question will be using the car as is, will repair it for sale or sell it directly on the wholesale market depends upon their needs and how quickly the turnaround on auto donations are expected.

Vehicles sold at wholesale auction, as many third-party auto donation agencies prefer, will usually generate a far lower value than you could have achieved if you sold it yourself. This is generally important only if you believe the vehicle should be worth over $5,000. In this case, you’ll have to get a receipt for the actual value of the car. If it’s worth less, the “fair market value” of the vehicle may be estimated.

That said, if your car is worth less than what you paid for it, a third party group to handle auto donations may be a good choice as far as your allowable charitable deduction is concerned. In the case of higher-end auto donations, you (and the charity in question) may be better served selling in some other manner and donating the resultant money to the charity directly.
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Auto Diesel/03_Auto Donations.txt

posted by Diesel Performance Truck on Feb 1

? Using Your Boat, RV or Auto for Tax Deduction Purposes

Much is made every April about tax deductions, despite the fact that very few people use itemized deductions to account for donations of physical goods such as clothing, furniture or autos. Tax deduction is further complicated by being discounted from your net income rather than the net tax owed. In essence, this means that an average taxpayer receives about 30% of a given donation in actual tax relief, depending upon their tax bracket.

Though it still represented less than a single percent of actual charitable giving in the United States, boat and auto tax deductions were a growing and very visible component of charitable giving when the General Accounting Office (GAO) issued a report on this topic to the US Senate Committee on Finance in November of 2003. At that time, fewer than 1% of the nearly 200 million tax returns filed in 2002 used an auto for tax deduction purposes.

Despite this relatively small amount of claiming, the GAO theorized that perhaps twice the number (about 700,000) of autos were actually donated. This suggests that after the sale of said autos, tax deduction rules made many of the donations worth reporting.

Often this is the case when people are better served by taking the standard deduction or they simply don’t know how to go about with itemized deductions and don’t have the extra money to hire a professional tax preparation specialist. Even when donating a fairly expensive auto, tax deduction limits that require signed forms (essentially affidavits of fair sale and donation) from the receiving agency may show a far smaller value than you thought the donated vehicle would be worth.

This is especially true of vehicles worth more than $5,000, though even those that net over $250 at auction require an acknowledgement of the donation from the charity in question. Even when as little as $500 is received for an auto, tax deduction requirements require a form (IRS Form 8283, section A) to be filled out, though only the most expensive ones require a signed form from the donation agency.

The disparity between the price listed in such publications as the Kelly Blue Book and the actual sales value of a car is largely dependent upon how the vehicle is sold and by whom. For instance, in 2002, a majority of charitable that accepted donations of vehicles were handled by third-party organization, even if the charity itself handled the initial contact calls. Despite the high value of the auto, tax deductions are limited to the actual value received by the charity, and that can represent a small fraction of the original gift.

That certainly doesn’t mean you can’t make a significant donation with your old auto. Tax deductions are certainly available, and for those who are accustomed to itemizing their deductions, such as small business owners and the self-employed, choosing this route can be both rewarding and profitable.

For instance, you don’t need to rely upon a third-party donation service, such as those who continually advertise in just about every type of media. Indeed, when donating an auto, tax deductions are the same whether you give away the actual car or the money that you receive from its sale. Selling the car yourself may be a bother, but you will reap as much as 20% greater deductions from such a cash gift.

There may also be charitable organizations in your area that have use of a running car. Though a large number of cars donated to charity don’t run well or at all, many do run and can assist low-income families in spread out metropolitan areas that aren’t adequately served by public transit. Such an auto, tax deduction aside, can really make a big difference for a family on the brink of making a living. Your deduction will be higher, and you’ve made a real, tangible difference in someone’s life, assuming you didn’t donate a lemon.

One may also consider donating a car or truck to the local high school (or technical college) shop class, especially if it’s a fine car in need of a lot of work. Even after the cost of materials for the auto, the tax deduction will be far higher when the car is eventually sold since the cost of labour need not be accounted for.
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Auto Diesel/04_auto tax deduction.txt

posted by Diesel Performance Truck on Jan 29

? Changing Tax Laws Combat Fraudulent Automobile Donation Deductions

When giving its report on the rise of automobile donation to the Senate Committee on Finance in 2003, the US General Accounting Office (GAO) found quite a bit of discrepancy between the amount of monies claimed as deductions on individual and business returns and the monies reported from actual automobile donation sales by non-profit organizations (NPO). As a result, certain changes were made to the existing tax laws that govern how deductions are claimed from automobile donation.

Though California was the only state that kept track of automobile donation proceeds at the time, it was found that third party organizations handling automobile donation usually took up as much as 70% of the amount received from the original sale of such a vehicle on the wholesale market. The exact amount depending upon the arrangement between the automobile donation organization and the NPO.

In California, third-party agencies that handle automobile donation are beholden to take only a given percentage of the sale, wholesale or not, as overhead expenses, no matter what those expenses actually are. As such, higher prices for vehicles are often achieved in private sales in that state, though such sales often take longer than automobile donation auctions in other states.

When the Finance Committee heard these figures and many more that proved the federal government was bearing the brunt of these donations in the form of donation discrepancy, the process to clear this problem with auto donation deductions was initiated. There’s nothing to get a sub-committee going like an estimated $600 million shortfall in tax revenues.

This is not to say that someone using the blue book value of their car to describe a barely running rust bucket given as a charitable auto donation is setting out to defraud the government, but it certainly has the same effect. In that 2003 GAO report, the majority of tax returns investigated from 2002 showed an average actual donation to the charities of 1-5% of that reported as the original donation on the resultant tax forms largely due to the use of third party auto donation agencies and the use of wholesale and wrecking yard sales.

To this day, a large number of NPOs continue using third-party agents to facilitate auto donation. The lack of communication as to where the actual overhead expenses of the third-party auto donation agents were almost entirely lacking in detail – instead, lumping all expenses under categories such as “towing” or “other.” Indeed, bookkeeping has been a real problem with many of these setups.

In an effort to combat this discrepancy with auto donation, new rules were instated by the IRS that require a statement of monies received from the sale of the car, rather than the “fair market value” of the vehicle for vehicles netting over $5,000. Because of this, many who consider auto donation as a viable source of deduction have grown suspicious of letting third-party agencies handle the auto donation process for them.

For instance, if you have a vehicle with a fair market value of $10,000 and sell it yourself, you’ll net about $10,000. After you pay capital gains and income taxes on that amount, you should still have over $7,000 to donate to the charity of your choice, whether they take auto donations or not. This does depend upon your tax bracket, but that full amount will go to the charity and be legally deductible. A third party may be lucky to get $4,000 at auction and give less than $1,000 to your charity and giving a lower reported value to you.

On the other hand, since rules were tightened in the early ‘aughts by the IRS, vehicle donations of over $500 are officially valued for deduction purposes by their sale amount (usually at wholesale) or by an independent appraisal. In fact, you must provide a copy of such an appraisal if your net auto donation is greater than $5,000. Auto donations with a value of less than $250 are still allowed under the “honor system.”

Regardless of the value of your auto donation, the title must be free and clear. You are also responsible for providing the name and address of the charity, where the actual auto donation occurred (very often your home, if towed), a description of the car or truck and the date when the auto donation took place. If the auto donation is valued there or after the fact at less than $250, you must also have a receipt.

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Auto Diesel/05_automobile donation.txt

posted by Diesel Performance Truck on Jan 26

? Dramatic Decreases in Automobile Donations in 2005 Hurt Legitimate 501 (c)(3) Non-profit Organizations

Though never a large part of the budgets of most IRS sanctioned non-profit organizations (NPOs), recent rulings by Revenue Service (and instigated upon the recommendations of the General Accounting Office and the Senate Finance Committee) have cut automobile donations down quite a bit. Of course, there are plenty organizations that promote the public good through philanthropic and service missions that have need of automobiles. In 2003, the GAO found over 4,000 of them as being registered non-profits with the IRS and accepting automobile donations.

That said, the volume of donations that originated from automobile donations in most non-profits profiled were minuscule compared with stock and property donations over $500. Clothing and furniture donations to thrift stores represented a large percentage of non-cash donations. availability, automobile donations accounted for only 6% of an average NPO’s budget.

Of course, there is no such thing as the average NPO. What has happened has been an increase in the number of people who are selling their vehicles and putting the proceeds towards their favorite charity or purchasing those stocks that will later be donated when they’ve accrued more value. There are also plenty of charities that actually do the selling themselves and take the time to make sales part of their training mission. This allows automobile donations to get a far higher price in the sale, which is useful if your car should be worth more than $500.

This also means that charities that can use a car directly have great need of automobile donations, even though the ever-present ads encouraging taxpayers to do so have become somewhat less prominent since the 2005 tax law changes. Generally, as ad revenues spent on advertising have gone down, so have the frequency of useful automobile donations, and this has sadly impacted some of the charities that can use those types of donations the most: those that serve a disadvantaged population directly through support or training.

As the practice of wholesale selling cars has gone by the wayside, third-party agencies that facilitate automobile donations have become somewhat less profitable, too. These companies, sometimes founded as non-profit organizations themselves, are now required to perform more accurate bookkeeping. As such, the market has shifted a bit to states that still allow these agencies to operate without oversight and the estimated 5% of third-party agents who handle automobile donations who have a non-profit mission themselves.

Many prominent stories that drove congress to finally act were also noted by the general public. Rates of giving declined precipitously in the 2005 tax season, as deduction rates decreased by as much as 90% when third-party agents handled automobile donations.

This is significant, since nearly all the charitable automobile donations in the United States were actually handled by third-party agents – usually for-profit businesses that are only very loosely regulated. At its peak in 2004, vehicle donation programs were thought to represent nearly $1 billion in reported automobile donations.

Partly the impetus for such legislation is the desire to curb any activity that uses charitable donations for private gain. But perhaps just as important to those in the halls of government are the lost revenues represented by the disparity between the revenues actually reported to NPOs versus the amount deducted from individual returns, even legally according to the law as it was written.

Regardless, charities that continue to benefit greatly from automobile donations include many valuable organizations, such as those who directly serve the poor with gifts of vehicles that can mean the difference between a paying job or not. Sometimes the only place one can find available in their price range is out of the range of public transit. Charities that handle automobile donations thusly are always looking for cars and trucks that require minnimal work to be made drivable and capable of being registered in the state.

Other programs include high school or college classes that teach repair classes with automobile donations. Though the market has fallen out of turning over automobile donations for quick profit, charities that legitimately can use your gift remain.

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Auto Diesel/06_Automobile Donations.txt

posted by Diesel Performance Truck on Jan 23

? Special IRS Regulations Regarding Charitable Boat Donation

With the sweeping legislation that caused a steep decline in the amount of money represented by auto donation, boat donation has also suffered a similar loss due to the plugging of a loop hole that was benefiting everyone except the federal government and the charities themselves. However, there are still perfectly legitimate and far more efficient ways to use boat donation to benefit your favorite charity if that is your motivation.

In the past, one could donate a boat, RV, motorcycle, trailer or just about any type of vehicle or appreciated object to a third-party agent that would handle the title transfer and sale. Such boat donations were almost always destined for the wholesale market, as it was faster and cheaper to get a small profit as it was all profit for the third-party agent since very little paperwork or oversight was required in such a low-end market.

By 2005, the rules that had been allowing for-profit organizations to charge exorbitant fees for their services, filing only the most minimal of paperwork and claiming as much as 80% of the wholesale value in fees to the charity, changed. As if by magic, those for-profit companies that legitimate charities had relied upon started pulling out of this now less lucrative market that was now asking for itemized statements of expenses and far stricter bookkeeping.

There have always existed non-profit organizations (NPOs) that took a more efficient approach to boat donation and handled the sale of watercraft to private parties themselves. Under current tax laws, this means that boat donations in excess of $500 are valued at the amount they’re sold for. As such, the deduction from your boat donation depends heavily upon how much effort is put into the sale. Charities that have always practiced their own high value sales have been well-positioned to take advantage of the cars still being donated.

Often, however, the boats offered up for sale from the boat donation market are not in particularly good shpae. This was how even perfectly legitimate uses of boat donation were actually cheating the IRS (and eventually many of the programs and services that rely upon federal funding) out of millions every year. When even a “poor” value was taken from an appraisal book or website, this value wasn’t’ a good representation of most boat donations. Even a boat in “poor” shape still describes one that reliably holds water and not all boat donations could say that.

On the other end of the spectrum, boats and yachts that are worth more than $5,000 are subject independent appraisal when they’re part of a boat donation. This appraisal should jibe with the amount the boat is eventually sold for. If not, both the charitable giver and the selling organization open themselves up to further investigation by federal officials.

Another complication with high value boat donation is the so-called “50% rule.” According to this stipulation, you are only allowed to claim 50% of your income in charitable donation in any given year. So, if you don’t make very much money but inherited a large boat, you may have to sell it yourself and make individual contributions from that money rather than giving the whole boat to charity.

Charitable NPO exceptions to this include educational organizations that take at risk children on fishing trips or help instruct a college class in bass fishing. As improbable as it sounds, a boat donated to the local police department for finding drowning victims is also an accepted type of direct donation.

It is often a matter of personal taste when giving away an old boat (rather than selling it yourself), especially one that isn’t in very good shape. You may have to consider whether it’s worth your while to itemize your tax return for the deductible value of a boat that was only fit for scrap metal.

Often mid- to lower income individuals and families take standard deductions anyhow. As such, donating a boat that isn’t in very good shape is less attractive than recycling options that pay off in hotel vouchers or cruise ship coupons rather than making pretenses about tax deductions from boat donation.

Caution is the new rule of law with boat donation. Contact your favorite charity and ask them how they handle boat donations before you make a decision.
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Auto Diesel/07_boat donation.txt

posted by Diesel Performance Truck on Jan 20

? Determining the Value of Your Charitable Car Donation and Avoiding Audit

It could be said that the new regulations regarding car donation, going into effect during the 2005 tax season, actually make it easier to avoid audit, since there is far less wiggle room to maneuver within. However, to actually take a legal deduction from your taxes, there will need to be some forms filed and receipts gathered.

The extent to which you are required to prove the worth of your charitable donation, given to a IRS approved 501 (c)(3) non-profit organization (NPO), is determined by the likely value of the gift. That said, one doesn’t always know what the sale of their car will fetch in the marketplace, regardless of what some chart may tell you. The actual price your car donation fetches will be your deductible value, and this can actually be rather low when sold on the wholesale market, especially by a third-party agency that facilitates car donation for NPOs that lack the facilities or manpower to handle such donations themselves.

Begun several decades ago by the Goodwill Corporation to train their employees and recycle unwanted vehicles, car donation programs were designed to be offered by NPOs alone to serve a direct and needy market. In the 1990s, a tremendous upsurge in for-profit organizations that spent a great deal of money on advertisements created a rapidly expanding trend of even lower-middle class individuals using car donation to reap the charitable tax deductions offered by the receiving agents.

When assessing your car donation, one must really consider what it is worth on the market, both if you sell it yourself and if you use another agency to sell it on the wholesale market for you. One can assume anywhere from 20-60% of the value of the retail market in such sales. Since a great many NPOs still use third-party (over 95% being for-profit organizations according to a scathing 2002 investigative article) intermediaries to manage the pickups, title-transfers and sales, you should give some hard consideration to how you want to handle your own car donation.

Many people choose to fix up and sell their own vehicles, preferring to pay tax on that “income” and give the remainder to the charity of their choice. Everyone, after all, takes cash. This way you also act as your own “middle man,” giving your time as well as the donated value of your car. You could even sell that car for scrap, have it hauled away, and give the proceeds to the charity, cutting out that sometimes very expensive middle step of involving a car donation facilitator.

Regardless of how you go about it, a non-cash gift to a charity is likely to fetch less than $250, you don’t need any sort of receipt from the NPO – the IRS will, in this case, take you at your word. All you need to supply is the name of the charitable organization that received your car donation, the date of the car donation, the place the donation took place,

However, if the value of your car donation is $250 or greater, you’ll need to get a receipt from the charity that is officially registered as an NPO or charity by the IRS. If you want to check up on a given charity’s status, they should be able to provide you with a non-profit tax ID number that you can then check against the IRS database. This receipt should be dated and indicate what use the vehicle was to be put to, even if it is just for sale.

Car donations destined for immediate sale are typically not valued for tax purposes until the sale has been made. Instead, one will receive a temporary receipt that indicates a transfer of title and a forthcoming receipt to be used for determining your deduction.

This is most often true of vehicles worth over $500. Such vehicles must be accompanied by Form 8283 (section A only) that the authorized charity issues along with their own receipt of car donation monies. In a perfect world, those separate car donation and charitable income figures will match up with each other as well as the amounts people are deducting from their personal or family income taxes, as they assuredly didn’t before 2005.

Sale values over $5,000 must also be accompanied by an appraisal from an independent agent that can verify the fair market value of any car donation. Now that one must present proof of how much their car donation earned at auction, there is little reason to make any kind of error when valuing your car donation for deductible purposes.

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Auto Diesel/08_car donation.txt

posted by Diesel Performance Truck on Jan 17

? Some Car Donation Charities FAQs the IRS Wants You to Know

Though many people consider the Internal Revenue Service (IRS) to be their own personal nemesis, given the ever-increasing cut of income that’s taken every year, the are some car donation charities FAQs it is to everyone’s benefit you should be aware of, as a taxpayer. To that end, the IRS has gone to great length to make their policies easily available in many different ways, some of which are generally more effective than others.

Regardless of how one gets their information about car donation, charities FAQs have been a matter of public discussion ever since the somewhat shady nature of vehicle donation was made apparent in the early ‘aughts. When the General Accounting Office (GAO) issued their groundbreaking report to the US Senate in late 2003 (as a result of public outcry and pressure from states), not even the IRS or Congressional Finance Committees seemed to know the rules and regulations regarding car donation charities.

FAQs have since been adjusted according to the new rules that made it far harder when for-profit companies tried to use legitimate charitable operations to line their own pockets. Now that many of these loopholes have been addressed, your odds of making a charitable automobile donation that you can feel good about are better than ever.

Among the most often asked car donation charities FAQs is how one goes about selecting a good, worthwhile charity. They may contact such a charity immediately, or look up an auto donation service that serves charities they support. The IRS would generally prefer you donate directly to keep potentially obfuscating the amounts actually going to the charities in question.

Of course, the IRS would also like to file the correct paperwork, since even a friendlier IRS still has a slavish devotion to filling out standardized forms. In the case of auto donations greater than $500, a donor is required to file a Form 8283, section A. This can be downloaded from the IRS website and should be signed by both the donor and the charity in question. Many charities will happily supply you with such a form – it is in your best interest to find out if this will be taken care of for you before you sit down to do your taxes at the end of the year.

Another important car donation charities FAQ is that if the donation is worth more than $5,000 (whether the vehicle is to used by the charity or sold), section B of Form 8283 must be filled out and attached to your deductions form. Additionally, you will also need to supply an independent appraisal with your return for such high-end donations. This can be arranged by the charity or yourself. The cost of such an appraisal may or may not be considered part of the donation – check with your CPA to make sure what the current regulations are given your exact circumstances.

When dealing with car donation and charities, FAQs pertaining to how you will go about itemizing your deductions govern how such a donation will actually benefit you and the charity in question. For instance, it is wise to consider the extra effort (or money in the case of paying a professional tax preparer) is involved in switching to itemized deductions. Some people are actually better served buy taking the standardized deduction. You should balance these potential expenses against the actual amount your tax burden will actually be decreased. In most tax brackets, this represents about a third of the value of your car donation. Charities and FAQs pertaining to car donation should clearly point out that deductions are from one’s net income rather than the amount of tax owed.

When considering the actual tax benefit of your car donation, charities FAQ usually do a good job of pointing out the limitations of the value you can claim as a deduction, as well as their own status as an IRS sanctioned non-profit organization. In the case of charities that have a limited or dubious mission, you could find your deduction challenged as going to a less-than-charitable organization. Do your own homework and verify the validity of any charity you choose to donate to.

And remember, all the car donation charities FAQs in the world won’t protect you if you take an active role in defrauding the federal government. Honesty is the best policy in all dealings with the IRS.
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Auto Diesel/09_car donation charities FAQ.txt

posted by Diesel Performance Truck on Jan 14

? How Car Donation and Charity Giving Can Reduce your Tax Burden

Most people assume that car donation and charity giving are tools the rich alone are able to use to ease their tax burden. This couldn’t be further from the truth! Anyone can file a tax return with itemized deductions if they bother taking the time and effort to do so. Though you are responsible for gathering receipts that back up your deduction claims, car donation for charity is now set up in such a way to make claiming the correct amount in deduction easier than ever.

In the case of car donation, charity organizations have been reliant upon donated items for a long time, though hardly as a large part of their overall donation dollars. In fact, a report issued by the General Accounting Office (GAO) in 2003, when levels of charitable giving was at its highest in terms of car donation, charity coffers were still little affected by the input of donated vehicles. As little as six percent of the “typical” charity was represented by car donation.

The self-employed are in an especially good position to take itemized deductions of monies turned back into the business as well as legitimate car donations. A charity that is sanctioned by the IRS and has a legitimate non-profit tax ID number should be more than able to provide you with the forms you need to make your deduction with the same confidence as any other type of deduction you save a receipt for.

Of course, individual returns are far more likely to claim the standardized deduction, making car donation to charity impossible to claim. However, filing itemized deductions can actually benefit most taxpayers providing they take the extra time to write them all down. Indeed, it is common for someone who had previously taken a standardized deduction to find their tax burden to be somewhat to significantly decreased as a result of this extra effort – as much as 30 or 40% in some cases.

With the extra money available for donation that can come from car donation, charity giving can be very useful for bringing one’s income down below the level where they might put you into a higher tax bracket. Near the end of the year there is often an increase in auto donation by those who are nearing a higher bracket they wish to avoid. This can save you quite a bit when done correctly.

Generally it is a good idea to not count on your car netting the sort of value at sale that you might imagine it would, given the Kelly Blue Book value listed. According to current IRS guidelines, car donation to charity that nets over $250 must be accompanied by a receipt that clearly outlines how much value the car actually was able to get (usually when sold on the wholesale or scrap markets) for the charitable organization in question.

Another potentially lucrative use of car donation to charity is using the donation amount as a deduction compared with the expense of fixing up the car yourself for sale later. Though this can actually save some people more money, one is liable for the capital gains of a vehicle that has appreciated since you took ownership at least one year previously. In the case of collectible cars that have already been fixed up, this can represent a real hit. Knowing what cars to donate and which ones to keep a hold of for investment purposes is highly volatile and subject to the other income specifics of such a donor.

It is always a good idea to talk to a CPA, especially if you already have the services of one retained for your regular tax preparation advice. If you own a business, this is especially true. Even the same car donation to charity can vary greatly in its value to an individual’s return.
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Auto Diesel/10_car donation charity.txt