Posts

Donating a car to the Kidney Kars program for a tax deduction

It’s super easy to give a car to charity, if all you want to do is get rid of it. The National Kidney Foundation of Utah & Idaho has one of the longest running (since 1990) and most popular car donation programs in the country.  You can find us on line at www.towKars.org or you can call us 9-5/M-F at 1-800-TOW-KARS (869-5277).  We’ll tow away your heap, and help you maximize your tax benefit. Here’s the basic gist, but you should discuss these issues with your tax preparer before you donate you so understand your tax benefit.  Also check out the IRS’s Publication 4303, a donor’s guide to vehicle donation here:  https://www.irs.gov/pub/irs-pdf/p4303.pdf

In order to benefit, you Must Itemize Your Return
If you want to claim a car donation to reduce your federal income taxes, you must itemize your deductions.

Here’s how it works: Suppose you’re in the 28 percent tax bracket and the allowable deduction for the vehicle’s donation is $1,000. That will save you $280 in taxes. If you’re in the 15 percent tax bracket and you get that same $1,000 deduction, it will reduce your taxes by $150.

If the car donation is your only deduction, it’s likely that taking a standard deduction would save you thousands more dollars in taxes. The only way that donating a car nets you any tax benefit is if you have many deductions and if their total, including the car, exceeds the standard deduction. And remember, you can always donate as much as you want to charities, but the IRS limits how much you can claim on your tax return.

The 2017 Tax Bill and Car Donations
Taxpayers who are considering donating a car to charity might be wondering how the tax bill passed into law in December 2017 could affect their decision. To begin with, the bill, called the Tax Cuts and Jobs Act, lowered tax rates but also altered the previous income brackets. Beginning in 2018 you may find yourself in a new bracket, which might result in either lower or higher taxes, depending on your individual situation. And that means the tax benefit from a donation might be more or less advantageous.

Another important change is that the new law raises the standard deductions from $6,350 to $12,000 for individuals and married couples filing separately; from $9,350 to $18,000 for the head of a household; and from $12,700 to $24,000 for married couples filing jointly. This change likely means that fewer people will find it beneficial to itemize deductions.

“The vast majority of taxpayers are going to take the standard deduction,” says David L. Thompson, vice president of public policy for the National Council of Nonprofits. “That means most taxpayers have no incentive to give to charity. That’s a serious concern. We fully expect the doubling of the standard deduction to reduce giving by $13 [billion] to $20 billion a year.”

With these and other changes resulting from the revised tax laws, it’s more important than ever for consumers to consult with their financial adviser or tax preparer before making a decision about donating a car to charity.

The Charity Must Qualify
The National Kidney Foundation of Utah and Idaho is a qualified 501 (c)(3) charity.  In order to claim your tax deduction, you should only donate to charities who qualify, like us.  A qualified charity is one that the IRS recognizes as a 501(c)(3) organization.

To help you determine whether a charity is qualified, the easiest thing to do is call the IRS toll-free number: 877-829-5500.

A Key Concept: Fair Market Value 
The IRS defines fair market value as “the price a willing buyer would pay and a willing seller would accept for the vehicle, when neither party is compelled to buy or sell and both parties have reasonable knowledge of the relevant facts.” In this scenario, neither the buyer nor the seller can be an auto dealer. Both must be private parties.

What complicates the matter for taxpayers is that under current IRS rules, you can only deduct a vehicle’s fair market value under four very specific conditions:

1. When a charity auctions your car for $500 or less, you can claim either the fair market value or $500, whichever is less.

2. When the charity intends to make “significant intervening use of the vehicle.” This means the charity will use the car in its work.

3. When the charity intends to make a “material improvement” to the vehicle, not just routine maintenance.

4. When the charity gives or sells the vehicle to a needy individual at a price significantly below fair market value.

Determining Fair Market Value
Vehicle values can be found in NADA, Blue Book, Edmund’s, Classified Ads. This can help you determine the car’s vehicle’s fair market value.  Fair Market Value must take into consideration the car’s year, make and model, mileage and condition.

Note the caution from IRS Publication 4303: “If you use a vehicle pricing guide to determine fair market value, be sure that the sales price listed is for a vehicle that is the same make, model and year, sold in the same condition, and with the same or substantially similar options or accessories as your vehicle.”

However, Getting Fair Market Value Is Actually Pretty Rare
It’s not realistic to expect that your car will meet one of the stringent fair market value requirements. Only about 5 percent of donated vehicles are suitable for use by charity recipients. About a third of donated cars are junked, and the rest are auctioned off.  So unless your car is in good or excellent condition, it will most likely be sold at auction or to an auto salvage yard.  At that point your deduction is based on the car’s actual selling price —  not your estimate of its fair market value. It is nearly impossible to gauge the actual selling price before you donate the car to Kidney Kars. It can take up to three years to sell a car.

The Tax Receipt and a Copy of the Title is Key
You need documentation.  Whether the car is recycled, or auctioned off. IRS Publication 4303 has all the details. Be sure to keep all the papers or electronic files. You’ll need them at tax time.

If there’s a delay in getting the car sold, you can ask the IRS for a six-month extension to submit your return (should you need it). Your second option is to file the return on time without claiming the deduction for the qualified vehicle. When the charity finally sends your notification, you can file an amended return using form 1040X to claim the deduction. You’ll have to attach a copy of the notification to your 1040X.

You Can Always Sell Your Car Instead
Besides giving your car directly to a charity, there is another way your vehicle can help a charity and also maximize your tax benefits: You can sell the car yourself and donate the proceeds. By doing so, you might be able to generate more cash than if you let the charity sell it.

Getting rid of a junker does help the National Kidney Foundation of Utah carry out its mission.  It will also make room in your garage for a new car :).  As long as you’re focused on getting rid of a junker with minimal effort and you’d look at the tax deduction as a nice bonus, then donating your car is a great option!

Me, doing taxes without a CPA

Right?  lol.  I hope you all got your Kidney Kars tax deduction from www.towKars.org before you filed your 2017 tax return.

April 17, 2017 is Tax Day. The National Kidney Foundation of Utah and Idaho has received close to 3,000 Kidney Kars donations this year.  In the past 3 weeks, we’ve had 150 requests Kidney Kars Donors asking for their tax receipts.  Many call or write us angrily accusing us of never sending their tax receipts.  Almost 98% of the time the receipt was in fact, already sent (time stamped by our database, and our email server).  However, 50% of the time, the receipt was emailed to a bogus or junk mail email account, that the donors themselves provided at the onset of the donation process. The other 48% of missing tax receipts made their way into spam (because of our .org address) or was straight up overlooked and then deleted by the donor.

I have no problem with junk email addresses.  I have one (don’t we all?). But if you want a TAX RECEIPT for your charitable contribution, consider giving your ACTUAL email address for a start.  The National Kidney Foundation of Utah & Idaho promises never to send junk mail. But I understand. There are a lot of charities that send a lot of additional promotions or continued appeals.  I guess Kidney Kars donations are the exception to that rule.  We’ve so carefully guarded the email addresses and pledged to use them only for tax purposes.   Anyway, to all of those who donated their car to Kidney Kars of Utah & Idaho for a tax deduction, we hope you get a tax return or that your payment to the IRS was not too painful.  Most specifically, we hope your Kidney Kars donation (free towing, tax deductible!) helped lower your tax liability.  So on behalf of the 3,000 Utah and Idaho kidney patients who benefit from the health and human medical financial services our programs provide, we thank you!

Donate the Car, Keep the Memories

donate the darn car

Donate the Car, Keep the Memories

http://www.youtube.com/watch?v=x6aLXi2MUmQ&feature=c4-overview&list=UU5Cs788esAFTEDVktHFry1g

Thank you National Kidney Foundation of Utah & Idaho

Monday, July 8, 2013
Dear National Kidney Foundation of Utah & Idaho.
Recently, I applied for and received a financial emergency donation grant from the National Kidney Foundation of Utah & Idaho. It was applied to my mortgage payment at a time when it was severely needed. I don’t know what I would’ve done without your help. My only income is Social Security & Retirement, and when I require additional medications or hospital stays it does not cover all our expenses! Thank you from the bottom of my heart for this donation/grant. I was able to catch up on some medical bills. I really appreciate all the NKF of Utah & Idaho does for kidney patients, with help like this, all the information you provide on kidney disease, etc.
Sincerely,
R. Rudolph

When you donate your car to National Kidney Foundation of Utah & Idaho’s Kidney Kars car donation program, this is who you are helping:

Dear Kidney Foundation,

I will be forever thankful for the financial aid grant I received from the National Kidney Foundation of Utah & Idaho this week. I literally have no idea what would have happened if I hadn’t received the grant to pay my debt to the gas company. I could not have survived the winter in my home without heat but I didn’t know how I could pay for it. It was such a cold winter. Once more I thank you with all my heart for the help and hope that you’ll be there for others in their time of need. GOD BLESS YOU .

Sincerely,
DJ Burlison

Lost wallet and car stolen– the National Kidney Foundation of Utah helps Utah kidney patients

Dear National Kidney Foundation, Just wanted to drop you a note telling you how grateful we are for this program that helped us with a large utility bill this summer.  On the 1st of July, I lost my wallet with $2,000 in cash from a paycheck that I had just cashed. I think it fell out of my car when I got out to go to the grocery store, and when I came back to look for it, it was gone! Then over labor day weekend, our car was stolen. It was found 3 days later with a punctured tire, and towed to an impound yard. We had to wait until our next pay day to get it out of impound! Even though it was not our fault the car was stolen, they charged us $960 to get the car out of impound. So it is with deeply grateful hearts, we say “thank you” for being the one piece of good news and good luck we have had in a long time. We are so grateful to the Kidney Foundation for their help in getting our utility bill paid so we could buy our meds and keep current on our insurance premiums. God bless you for all you do for kidney patients! Sincerely, V. & B. McMarin, Sandy, UT

I am always SO cold.

Dear Kidney Foundation of Utah, I am a grateful recipient of a grant from the foundation. I received assistance to pay my heat bill. My husband had two very serious injuries at work and was hospitalized around the time I was diagnosed as being in the final stages of renal failure. We lost our home and the basement apartment we can afford is so cold. Because of the dialysis and my low creatine levels, I am ALWAYS COLD. We have been careful not to turn up the heat because we can’t afford it. But it was just so cold this month. We truly appreciate the grant of $122 to help us pay our heat bill. Your generosity is so deeply appreciated. Sincerely, Curtis and Dorothy R. (Athon, Idaho)

Today is my 65th Birthday

Dear Kidney Foundation, Thank you so much for your assistance in making a $350 payment to the Medicare Premium Collection Center. Today is my 65th birthday. Not being dropped from Medicare, has made it a very happy birthday for me! Thank you! Thank you!

Utah, BYU coaches lend assist to Kidney Foundation

http://www.deseretnews.com/article/700036893/Utah-BYU-coaches-lend-assist-to-Kidney-Foundation.html