The Cars 4 Causes Blog.

Can your Car Donation Really Save you Money???

So here you are at the end of the year and you’re doing everything you can to defer your income and accelerate your expenses. You want to leave no stone unturned when it comes to potential tax deductions. That’s why its 10pm on a Friday night just 1 day before the end of the year and you’re in your garage wondering if donating your old car would be a good idea.

You’ve seen the ads on TV, you’ve heard the radio jingles, and you’ve even seen the billboards close to your office; “Donate your Cars to Charity; Get a Tax Deduction this Year!” But, is it really worth it? Can you really save money on your taxes by donating your car?  And who do you donate it to?  How do you choose, there are so many ads?  If buying your car was such a horrible experience, how can you trust someone to take it from you for free?

Well, these are all good questions and, unfortunately, I don’t have any answers for you. This is one you’ll have to figure out on your own. But I can offer a few suggestions to help you with your decision.

A.  A Car Donation to a qualified charity is deductible under the IRS Code and could result in significant tax savings for you depending on the value of the car donation and your own tax situation. Please refer to the IRS website regarding car donations and always consult your tax professional. I’m sure he will appreciate your call at 10pm the night before New Year’s Eve.

B.  The car donation business is a sorted group of players, very few of which you would want to invite into your home for dinner and fewer still that you would want to invite to your little private garage party the day before New Years Eve. Don’t get me wrong, we’re all good people, but when we are competing with hundreds of others all standing on the corner with a cup in our hand waiting for some generous soul like you to place a vehicle in that cup so that we don’t starve this winter you get a lot of weird behavior that makes us all seem like a bunch of undesirables. “Hey, over here” yeah you!  Thinking about donating your car? How about a free vacation? Would you like that? No? How about a gas card? You need one of those? I’ll pick up your car for free? I’ll do all the paperwork? Take a look at these pictures of my starving family, my littlest is so hungry, please help!”

Yeah, it’s weird out there, and that makes it difficult for you to trust any of us.  But still, you could realize a substantial tax savings from donating your car and if you can use the deduction, it’s something you should consider. So here’s what you need to do.

1. Donate directly to a charity. There are few charities out there that operate vehicle donation programs, and there are a lot more who engage the services of a commercial fundraiser who operates the vehicle donation program on their behalf.  Seek out the charities that operate their own programs and you have a greater chance that the proceeds from the sale of your donated vehicle actually go to fund a charitable cause and not line the pockets of a private enterprise with a parasitic relationship to the non-profit world.

2. Make sure the charity you choose has the ability to recondition your car and sell it retail.  A retail sale of your donated vehicle can bring the highest price for your donation and that translates into the highest tax deduction value for you. Of course, not every donated vehicle can be or should be reconditioned. Sometimes it doesn’t make sense financially and the charity is better off wholesaling your vehicle to get the highest return. But, if the charity you choose doesn’t have this ability, you could be leaving a lot of tax savings on the table by giving your car to them.  Let’s look at an example:

Here’s a vehicle that was donated to Cars 4 Causes this year. It is a 2001 BMW 540i with 97,000 miles. When we received this vehicle at one of our sales lots, it was found to be in good mechanical conditions, with excellent interior.  The body was intact, but the vehicle had been stored outdoors and the paint and finish had severe scorching and weather damage. Repairs needed were new brake pads, grill trim replacement, passenger rear view window cover replacement and a paint job. Had we sent this vehicle to one of our wholesale lots we would have received $1,500 to $1,800 maximum for the vehicle in its donated condition.

Cars 4 Causes has the expertise and staff to perform minor repairs to its donated vehicles such as those that were needed on this BMW. So, we reconditioned this vehicle and sold it through our on-line retail sales outlet. The sales price received for this vehicle – $6,100. That’s a huge difference and one that you should certainly pay attention to if you’re interested in getting the maximum tax write off for your vehicle donation.

3.  Look for Experience and Longevity. Make sure the organization you donate to has the experience to handle your donation properly, has been around for a long time and isn’t just some fly-by-night organization that just opened its doors and posted a website to prey on year-end donors like you. Cars 4 Causes is America’s 1st vehicle donation charity. We opened our doors in 1997. We’ve handled more than 160,000 donations and raised over $100 million, sharing these proceeds with more than 16,000 charities, schools and religious organizations through the U.S.

4.  Demand Visibility. As you are researching all of the available organizations that will accept your donated vehicle notice how many of their websites don’t provide an office address, a list of the people running the organization, copies of their IRS Form 990’s or a copy of their annual audited financials. Without these items to evaluate the organization you might as well be driving at night with your lights off!  It’s important to know who you are giving your vehicle to and what they are doing with it. Don’t compromise on this point or your could find yourself without a vehicle, without a tax receipt and without any way to find out what happened or find anyone to help you.

If you determine that donating your car is right for you, Cars 4 Causes would be grateful for your vehicle donation. We would do our best to get you the highest tax write-off value and the most money for charity and to make your donation process as convenient and painless as possible. Best of luck with your decision and happy holidays to you and your family.

By: Lori Singmaster

After fourteen years of living on the Cars 4 Causes website, the Boats 4 Causes boat donation program is finally moving out and getting a place of its own!!

Since 1997, when we launched Cars 4 Causes, we accepted our 1^st boat donation and have been quietly accepting boat donations all this time from around the United States.   Currently, we have so many boat donations each month and such a tremendous following of buyers interested in purchasing our donated boats that it only makes sense to give Boats 4 Causes  its own website, www.boats4causes.org.

Our new website addresses the specific needs of those wishing to donate their boat, offering each donor complete transparency into our process, resulting in the highest price for the sale of their boat donation.   The donation process is simple and can be accomplished by filling out an online donation form from the new site or calling one of our donation specialists at 855-800-2628(BOAT).

The process of donating a boat is a little more emotionally complicated than that of a car donation.  Boat donors tend to be a little more attached to their boats and they want to make sure that their “baby” is passed on to the right organization.   Often times, it takes a boat donor 30 to 60 days to make the decision to donate once they have first made contact with Boats 4 Causes.

With each boat donation, our team creates a unique relationship with the donor, understanding the ins and outs of their boat donation and enjoying the memories and good times that each donor has had on his boat.

Many times donors are parting ways with their vessel because of a death or illness of a spouse.  The process of getting rid of their vessel is usually very emotional and hard for the donor.  Usually there is nothing wrong with the vessel, they just are unable to use it any longer or there is a lot of emotion tied to it.

Many donors also come to us after they have tried selling their vessel themselves, only to find it difficult, frustrating and sometimes failing to receive any bids at all on their prized possession.  Boats 4 Causes can sell that same boat in 7 days and many times a bidding war ensues.  

We are a national brand and we have buyers from across the United States checking our website daily for new listings.  This is the result of fourteen years of hard work in cultivating the selling side of each boat donation. 

When a potential buyer sees a Boats 4 Causes listing, they trust that we have done our best to be as thorough and accurate as we can when evaluating the boat and its contents and know they will receive a fair and honest deal from Boats 4 Causes. 

Boat donations are tax deductible, so the higher price we obtain from the sale of a boat donation, the greater tax deduction value for the donor.   Our donors realize this and appreciate all of our hard work and brand equity that Boats 4 Causes brings to the table.

We hope you will come to us when the time is right to sell your “baby”.

By Pat Jessup, Executive Director

Ever wonder if your vehicle donation really makes a difference?   Well, take a look at this letter we recently received from Ericka Bigger of Project Understanding, and you might just be convinced that it does.  The name of the family, and family members, have been changed in the interest of privacy.

Hello Pat,

My name is Ericka Bigger from Project Understanding and your organization helped us about 8 months ago with a car for one of our homeless families who entered our Transition House Program.   I wanted to give you a follow up on how [Jennifer] has been doing since being blessed with the vehicle your organization donated to her and her children.

Before the vehicle [Jennifer] was struggling to complete any goals such as gaining employment or finishing her high school diploma since she also has 3 small children with her. Since getting the vehicle [Jennifer] has been attending school regularly at the Ventura Adult Ed and will be graduating in June!! Her teachers and I are very excited as is [Jennifer].  [Jennifer] believed that she would never be getting her high school diploma since she had so many barriers to accomplish. Yet with your great donation it allowed her to get to school everyday to make this goal come true! Also [Jennifer] is working part-time and attending school full-time. As soon as she completes her high school diploma she will be working full-time and will be deciding what her next goal is. Since also being in our program [Jennifer] has saved over $2,000 and continues to save. [Jennifer] has one year left with us and we know she will continue to make us proud.

I did want to share her success with you since your organization’s donation gave her motivation and the tool to continue in her goals.

Thank you for everything

Ericka Bigger

Transition House Program Manager

We receive letters like this every day from many wonderful organizations that are doing great things to help those in need.   If you have been considering donating a vehicle but weren’t sure if or how it would help, rest assured there are people and organizations that Cars 4 Causes works with that depend on these generous donations to improve the lives of many families and individuals in need.  So don’t hesitate, please donate today!

By Patti Palmer

Effective NOW, when you donate your car, boat, motorcycle or RV to Cars 4 Causes^®, you’ll be entitled to receive a FREE Cash Rebate Voucher that grants you access to the Cash Rebate Mall for one full year where you can earn up to $3,000 in cash rebates from over 800 of your favorite online retailers like Target, Kohl’s, Macy’s, the Gap and Walmart.  So what does this mean for you?  By purchasing products from your usual favorite stores, like a new DVD player from Best Buy or some linens from Target, you automatically get money back in the form of a prepaid Visa card!!

The Cash Rebate Mall is an easy-to-use shopping program that offers YOU as our donor the highest rebates available from hundreds of major merchants.   Cash Rebate Mall also provides special offers, coupons and other added discounts to help you save the most money.

We wanted to give our donors something they can actually use in their daily lives, especially at a time when most people are working hard to get back on, or stay on, their feet financially.  Many companies offer “Free” gimmicks that often come with unforeseen costs like hidden fees and obligations down the line.  But that is definitely not how we work here at Cars 4 Causes.  Instead, we wanted a way to reward our generous donors with something that provides significant and tangible benefit and most of all is absolutely FREE!

The whole program is very simple too!  Donate your vehicle, we’ll send you a notice to claim your Free Voucher online, redeem your claim within thirty (30) days and then go to Cash Rebate Mall.com to start shopping!  How easy is that?

What’s even better! The program has no effect on the value of your vehicle tax deduction.  So not only can you earn up to $3,000 in cash rebates, you receive a valuable IRS Tax deduction from your vehicle donation – all of this in addition to doing a wonderful deed by helping those in need.  Everyone benefits!

By Maria U Bernston, CPA

Its Unavoidable, Tax Season is Upon Us!

For those of you hopelessly procrastinating them, mire in the muck of doing them, or breathing a sigh of relief for completing them – here is some helpful tax information to keep in mind:

Here is what you need to do to get the maximum deduction for your vehicle and “why”:

1. Check out the charity to make sure that it is a “qualified” organization – otherwise your donation will not be tax deductible.
2. Determine that you qualify for a tax deduction
3. Determine the maximum amount of your deduction
4. Know the recordkeeping and filing requirements associated with your donation

1. Qualified Organization:

Cars 4 Causes is a 501(c)(3) organization which is qualified to receive tax-deductible contributions.

2. Do You Qualify for a Tax Deduction?

• As an individual, you can deduct contributions to charity only if you itemize deductions on Schedule A of Form 1040

• There are certain deduction limitations; for example, your total charitable deductions for the year cannot exceed a percentage of your adjusted gross income.  Several other limits and exceptions, such as donation deduction for a previously depreciated vehicle, may also apply.

3. How Much Can You Deduct?

• The maximum amount you can deduct on your income tax return is the sales price of the vehicle.

4. What Documentation Do You Need to Keep?

Good news – Cars 4 Causes provides all of the following documents, as applicable, in a timely manner. You need to keep them with your tax documents so that you can support your deduction or file them with your tax return, if required.

• For donations of less than $250, you will receive a receipt from Cars 4 Causes that includes the charity’s name, date and location of donation and description of the vehicle.

• For donations of $250 or more, but not more than $500, you will receive a contemporaneous written acknowledgement from Cars 4 Causes.  This acknowledgement includes the same information as above.  You must receive the acknowledgement by the due date for filing your returns (including extension) or the date you actually filed your return, if earlier.

• For donations greater than $500, you will receive a contemporaneous written acknowledgement (Form 1098-C) that includes the gross proceeds Cars 4 Causes received from the sale of the vehicle.  You should read the instructions accompanying the form carefully to make sure you report the donation correctly on your return.

If the deduction you are claiming for a donated car is greater than $500, you must also complete Section A of Form 8283.

5. The Filing deadline is approaching and still no Form 1098-C?

This probably means that your vehicle has not yet been sold. You have three choices:

• Request an automatic 6-month extension of time to file your return; you can get this extension by filing Form 4868 either electronically or as a hardcopy by the filing deadline, which is April 18^th in 2011.

• File the return without claiming the deduction for the qualified vehicle.  After receiving the Form 1098-C, file an amended return, Form 1040X, claiming the deduction. Attach Copy B of Form 1098-C (or other statement) to the amended return.

• File the return claiming a deduction for less than $500 based on the contemporaneous receipt you received from the charity. File an amended return, if the sales proceeds on Form 1098-C you receive from the charity upon sale of your vehicle differ from the amount you claimed as a deduction. Attach Form 1098-C as above

While Cars 4 Causes makes the donation process easy and provides you with all the required documentation, reporting charitable donations on your tax return is not always “easy”. In addition, every individual’s tax situation is different, so you should seek professional advice.

Maria U Berntson, CPA, is a partner at Lindsay and Company LLP, Certified Public Accountant. At Lindsay and Company, LLP,  we approach your needs as a team of professionals with diversified skills, focused on providing solutions toward achieving your financial goals as an individual, in business, or as a non-profit organization.  For assistance or just to chat about your tax situation, business or financial goals, please contact us at 805-650-5915 or visit us at  www.lindsayandcompanycpa.com.