Getting ‘Mileage’ Out of Your Used Vehicle This Holiday Season
No one wants to think about taxes during the holiday season, especially when finances are tight.
However, many people don’t realize they’re sitting on items that could provide tax benefits for 2015, while also helping out their favorite registered charity.
Take, for example, an old car, boat or motorcycle. If you need to free up valuable garage space, or offload a vehicle that’s no longer working, there are simple ways to benefit from these old assets.
Getting ‘mileage’ out of your used vehicle is may still be possible as the 2015 winds down. The National Kidney Foundation (NKF), for example, runs the oldest vehicle donation program in the nation - started in 1983. Over the last 32 years, Kidney Cars has received more than 800,000 used cars that have provided millions in funding for research grants, free health screenings for at-risk individuals, patient services and education.
Kidney disease affects over 26 million American adults, and a further 73 million are at risk, so it’s more important than ever to use your old vehicle to do some good. All you have to do is call 800.488.CARS (2277) or complete a form on kidneycars.org to donate. You’ll schedule a pick up time that best suits your schedule and in return you’ll receive information that could help your finances while making a difference in the lives of millions with kidney disease.
Here’s a guide to the current tax law and how vehicle donations can be used to help you as you file for 2015:
Tax Laws for Vehicle Donations
Tax laws for vehicle donations differ from the rules for most other non-cash donations.
The Kidney Foundation resells the vehicles it receives. In most cases, the resale price determines the amount of a donor’s donation.
If a vehicle sells for more than $500, the selling price at auction determines the tax deduction amount.
If a vehicle sells for less than $500, the Kidney Foundation may not issue a Form 1098-C. In that case the taxpayer determines his own deduction, but it must always be less than $500.
There are special rules for vehicles retained by a charity for its own use, or donated to needy individuals, or materially improved before sale. These rules don’t apply to the Kidney Cars program.
How to Use a Donation When Filing Taxes
The Kidney Foundation will send donors Form 1098-C, showing the gross proceeds from sale of their vehicle, and explaining that their deduction is limited to gross proceeds. Taxpayers must attach a copy of Form 1098-C to their returns. They can attach a paper copy, or use an electronic copy if they’re filing electronically.
The donation can only be deducted if the taxpayer itemizes deductions. In addition, at certain income levels deductions may be limited.
The Other Advantages of Charitable Vehicle Donations
Donation relieves the financial burden of registration fees, insurance and taxes.
It’s a convenient way to get rid of unwanted items.
Best of all – you’re helping further the Kidney Foundation’s mission. So donate today at www.kidneycars.org.
Credit to Michael J. Stevenson
CPA, CFE, CFF, ABV, NKF Board Member and Kidney Donor
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