The Cars 4 Causes Blog.

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.

MAKING YOUR CAR DONATION EASY!

Nicole Anaya – March 1, 2011

Are you thinking about donating your vehicle to charity?  If the answer is yes, let me share some tips with you to make the process smooth and easy. As a Donation Specialist for Cars 4 Causes® for many years, I processed more than 4,300 vehicle donations, so I’ve highlighted below the most important steps you need to know!

1.         ARE YOU DONATING TO A REAL CHARITY?

Before you make that call or click on the online donation form, please make sure the charity you are planning to donate to is a 501(C)3 registered non-profit organization qualified to accept vehicle donations. This is the most important thing you can do to protect yourself. By donating to a qualified 501(c)3 non-profit organization, you will ensure that when it comes time to claim your  tax deduction you will be able to use it.  Cars 4 Causes was the 1st 501(c)3 non-profit organization in America to be approved by the IRS to accept vehicle donations, so you can rest easy when you donate to us.

2.         INFORMATION YOU’LL NEED WHEN YOU DONATE.

During the process, whether by phone or an online form it may seem like we need a lot of information. As a donation specialist, it’s our job to get you the highest tax deduction possible and the most money for charity. Therefore, the more information we get from you, the better we can do our job.  And while we are grateful that you have chosen to donate your car to us, you will be grateful for all of the intrusive and annoying questions we ask when April 15^th rolls around and you have a generous tax deduction as a result.

Here’s the basic information we need:

Here’s more information we’d like to have (it will help us evaluate your car donation faster):

*A.      Title questions are one of the most important things we will ask.  They help us verify ownership and vehicle information. In most cases, a lost title may not be a problem.  Each situation varies which is why we urge you to call and speak to one of our donation specialist who can help you through this step.

**B.     Registration questions are frequently asked to determine if there are fees due by the licensing agency in your state.  If the vehicle you want to donate has a registration that is due, it’s best that you register it as non-operational to avoid any back fees you might be charged prior to donating your vehicle.

3.         SCHEDULING A PICK-UP

Once we get all your information and accept your donation, one of our tow companies will call you to schedule a pick-up time within 2 business days. If it is an emergency, we can expedite your request and have your vehicle picked up within 24 hours. On the date of tow you will need to give the title (pink slip) and the keys to the tow driver. If you can’t be there at time of tow, you can leave the pink slip and keys under the dashboard.  In return, you will receive a pick-up receipt from the tow driver. Once your vehicle is delivered to us, we’ll send you a pick-up confirmation letter with our charity information, your name, date of donation, year, make, and model of your donated vehicle. After your vehicle has been towed away you should call your insurance company and let them know you no longer own the vehicle.

4.         RECEIVING YOUR TAX RECEIPT.

The last step in the process is waiting to receive your written acknowledgment letter commonly known as a tax receipt. This tax receipt is to be used for your tax purposes and will be mailed to you after the vehicle has been sold. It normally takes us between 60-90 days to process, evaluate, repair (if necessary) and sell your vehicle.  If you plan on claiming a tax deduction and your vehicle sells for more than $500 we will send you your tax receipt along with a form 1098C (to do this however, we will need your social security number). If you don’t plan on claiming your donation as a tax deduction and/or the vehicle sells for less than $500 we will only send you a tax receipt (no social security number will be required).

Donating your vehicle can be a great way to save money on your taxes and help others at the same time. There are many choices out there, but only Cars 4 Causes has the experience and expertise to get you the most our of your vehicle donation.  Afterall, we are America’s 1^st vehicle donation charity. So take advantage of our 13 years of experience and get the most from your car donation.  “It feels good helping others.”

I hope this gives you a better idea of what to expect when donating your vehicle. Please keep in mind that Cars 4 Causes also accept boats, motorcycles and RVs. You may fill out an online donation form or feel free to give us a call at 1-800-488-9949 and a friendly donation specialist will be more than happy to assist you.

Donating a car is a big step for most car donors, especially if you have not donated any vehicle previously. So, we do our best to answer lots of questions right here on our Website and to give you lots of information about Cars 4 Causes®, The Charity That Gives To Charities (R).

Regardless of how much we can tell you on a website, though, we know that often you’ll feel better informed if you can talk to someone who knows the vehicle donation process and who can guide you through it.

We have a knowledgeable staff on hand for just that purpose. You can call them at 800-766-2273 with your questions.  You can also initiate the process via our website, and then we’ll have someone call you to complete the process.

Overview of the Car Donation Process

Step One:  Submit a Vehicle Donation Form
Submit a vehicle donation form via our Website or contact us at 800-766-CARE (2273). At this point, you provide general information on the vehicle you wish to donate and select the charity organization you wish to benefit. (We accept most intact vehicles, whether they are running or not. No smog certificate is required.)

Step Two: Schedule a no-cost to the donor pick-up
Once you donate your car and it is accepted, one of our tow companies will pick up the vehicle at no cost to you (the donor), or you may drop off the vehicle at one of our car donation center lot locations.

Step Three: Cars 4 Causes® Sells your donated vehicle
The donated vehicle will be sold once we have a clear transferable title. A written acknowledgment will then be sent to you (the donor) for your contribution. You’ll keep this paperwork for your taxes. You’ll find more information on tax write-offs on our FAQ page.

Your Donation Makes a Difference

Whether your car donation is an old clunker or a newer vehicle, a boat, RV or other vehicle, donating it to charity helps those in need. So, please browse our website and get to know us, see our FAQs for answers to common questions, and call us at 800-766-2273.  We’re here to answer your questions. So what are you waiting for? Donate car today!

Fall is in the air. The wind is blowing today and the temperatures dropping. The weather is telling us that it’s autumn and we’re entering the fourth quarter of the year, which here at Cars 4 Causes® is one of our busiest times. This is the time of year when many owners think about donating their vehicles to meet end-of-year tax deduction deadlines. And it’s a time of year when donations to charities are on peoples’ minds even more than usual.

Getting Your Tax Deduction

If you’re considering car donation to charity, please check out our FAQ’s for insight into the donation process. This year is an especially good year to donate for many of us. See our July blog explaining additional 2009 tax incentives.

You’ll find our general explanation of tax deductions in our FAQs. In brief, it says:

Donations to a non-profit organization or charity that is classified under 501(c)[3] are often tax deductible. Cars 4 Causes® is a 501(c)[3] and therefore donations made to us may be utilized as a tax write-off, allowing you a car donation tax break. (Everyone’s tax situation is different, so we do advise you to consult with your tax professional to determine tax benefits from your car donation.)

The best and most compact resource we’ve found to describe the rules around car donation tax write-offs is A Donor’s Guide to Vehicle Donations. It’s a 16-page brochure and is downloadable. We recommend it as an excellent resource because it comes straight from the source: the IRS.

We’re also here as a resource for you, available toll-free by phone at 800-766-2273 and by online chat. We’re always happy to share our expertise.  As The Charity That Gives To Charities®, we make it easy for you to choose a charity to benefit from your generous donation. If you’re thinking of making a vehicle donation, call now. Get your tax deduction and make your charity donation, too.

Wondering what happens to dear old Betsy once you donate her? Judging from our phone calls, many people do want to know where their old car goes, so we thought we’d share what happens here when a car donation arrives. Whether it’s a relatively new car or a very old family friend, it gets star treatment at Cars 4 Causes®.

When you donate, you determine what charity benefits from your vehicle donation, and we make sure we make the most of the donation for both you and your charity. (See our list of over 13,400 charities.) Some cars not designated with a charity enter our Give-Away Program that directly benefits needy individuals.

Choosing the Best Route for Your Car Donation

We have our own sales locations where we evaluate the car to determine its route.

• When it is cost-effective, we make major or minor mechanical repairs, and then we detail the cars and advertise them for sale. The cars, vans, trucks and other vehicles are sold, and then they move on to their new owners.
• Some cars go to auction, as this is the best route for them, for the best return.
• If the cars are not road-worthy, we recycle them through salvage and scrap channels. The scrap is recycled, turning up next in a surprisingly wide array of products – your new bicycles, your new appliances, new cars.

Your Tax Deduction

At the completion of any of these sales processes, you receive a tax deduction receipt for the donation. And, because of these evaluation and sales processes, Cars 4 Causes® The Charity That Gives To Charities® receives the highest average return for you in the industry! You benefit from this success in your tax write-off, and your charity benefits with a corresponding donation.

So, whether it’s old Betsy or that slightly used car in the garage, your donation is honored and appreciated all along the donation route.  Thank you for your generosity.