Donate Car Chicago

Posted in Chicago, Donate Car by admin

Chicago Car Donation Guide

Chicago is a large city packed full of charities that are willing to take your car as a donation. If you want to donate a car in Chicago, listed below are a handful of charities that are ready to accept your donated car today:

Charities to Consider

Glenkirk: Started over a half century ago, Glenkirk has been providing support programs for people that have disabilities. Assisting more than 1,000 people in the Chicago area, Glenkirk will be more than happy to take your car. All they ask is that you have a transferable title and no major parts shouldn’t be missing from the car. They will tow the car to their location for free.

Hearthstone Communities: Founded in the early 1960s, Hearthstone is a non-profit organization that assist adults with disabilities. With a 70-acre campus located in Libertyville, Hearthstone currently assists more than 200 men and women. Hearthstone will pick up your car within 24 hours of making a call for free. If you chose, you can drop the car off at their location.

Paws Chicago: Paws Chicago rescues animals of all ages and provides them with a great home. With the car donations that they receive, they use the sale of the car proceeds to help save homeless animals and provide veterinary care. To donate your car to PAWS, a free pickup can be arranged within 24 hours.

How to Donate

Most, if not all charities will pick up your car directly at your home with a tow truck service. While most charities will ask that your car is in working order, many will take cars that doesn’t run and scrap it for parts. The charity will also ask for the vehicle’s VIN number and a signed title. All charities will have a number that you can call to set up an appointment. They will also assist you with any questions that you have.

How Deductions Work

If you donate a car in Chicago, not only will you be able to help a charity in need, you’ll be able to save a few dollars come tax time. The IRS will allow you to claim the full value of the vehicle of the final sale price. Since most charities are going to sell the car, the final amount that they sold the car for will be your final deduction. For example, even though you thought your car was worth $2,000, the charity could have sold it for $1,500. If that was the case, you would only be able to claim the $1,500.

If the value of the car is less than $500, the donor will be able to determine a full market value. The charity can just provide documentation after receiving the car. If the value is over $500, the IRS will allow you to claim the full sales amount or value on your tax return. The charity will send a 1098c form providing you with the final sale or market value amount.

To donate a car in Chicago, consider a few of the charities mentioned above. Donating your car is a great way to get a car off your hands and help a charity that would be more than grateful to use or sell it.

Car Donation Tax Credit

Posted in Donate Car, Tax Deductions by admin

Tax Credits with Car Donations

Donating a car is a fantastic way to save a few dollars with taxes at the end of the season. Let’s not forget that it’s also a great way to help those truly in need. With taxes though, there are a lot of things to know before donating a car to a local charity. To help determine a car donation tax credit, here are a few important things to know:

Qualification Rules

In order to qualify for a car donation tax credit, an individual must provide detailed information in regards to the donation amount. The amount of the car value cannot exceed 50 percent of the individual’s adjusted gross income at the end of the year, and the charity must also be a qualified charity, known as a 501(c)(3) organization. If all of this criteria is met, a successful deduction can be made. If the charity isn’t registered, the IRS will often deny this sort of deduction, so it’s very important that an individual researches a charity before making a decision.

Claiming a Tax Credit

A tax credit for a car donation is wildly going to vary depending upon the final value of the car. If the value of the car is less than $500, the taxpayer can include this deduction in their standardized deductions at the end of the year. If the value is less than $500, the deduction can’t exceed that amount. If the value of the car exceeds $500, the taxpayer will have to itemize their deductions on their Schedule A via the Form 1040.

Listed below is how you can determine your value if it exceeds the $500 threshold:

Determining a Value

Most charities will often sell their cars immediately after receiving it. The IRS requires that all charities send a sale receipt to the person that donated the car within 30 days. If the car isn’t going to be sold, a fair market value will have to be determined. Again, this fair market value receipt will also have to be sent out within the 30-day time frame. During this time frame, the charity will send a 1098-C form claiming the finalized value.

In terms of value, the charity will always have the final say-so in terms of the car value. If someone donated a car that was worth $2,000, but the charity decided to sell it for $1,200, the final deduction couldn’t exceed that $1,200 amount. There are some exceptions to this rule though. If the charity used the car for their own purposes for a designated amount of time, the car could be written off for the car value amount.

As long as the charity is registered, individuals can receive a car donation tax credit. Just remember that the deduction amount isn’t what a taxpayer will necessarily save at the end of the year, but rather a deduction from their income. Depending on the tax income bracket, the average individual can expect to save around $100 in taxes for every $400 the car is worth.

Donate Car For Tax Deduction

Posted in Donate Car, Tax Deductions by admin

Car Donation Deductions: What You Need to Know

Donating your car to a worthy charity is going to do more than help someone in need; it will also provide you a nice deduction come next tax season. Taxes can be a rather complicated process, especially when it comes to deductions. If you’re thinking about donating a car, and you want to know exactly what you can receive in terms of tax benefits, listed below are some things you should know:

The $500 Limit

To donate car for tax deduction purposes, a taxpayer must be aware of the $500 threshold that is placed on vehicles by the IRS. If the value of your car is worth more than $500, and you want to claim this amount, the process can become complicated. If the car claimed on your taxes is worth less than the $500 threshold, the IRS won’t require any additional documentation and won’t require itemization.

Now, if the value of the car is worth more than $500, here’s the likely scenario:

Let’s say that you donate a car to a local charity. The car that was donated was worth $1,500. Most charities are going to turn around and sell that car for a specified amount. When this car sells on the market, the charity will send you a sales receipt in the mail. Now, let’s say that the charity sold the car for $800. If this was the case, you’ll only be able to deduct the sales price of $800, and not the $1,500 you said it was worth. When you hand over a car to a charity, they are required to hand over a receipt within 30 days of the drop off. If they choose to sell the car, they must provide a sales receipt within that 30-day same time frame.

The Exceptions

Using the given scenario mentioned above, there are other exceptions to be aware of. For instance, let’s say that you donated that same $1,500 valued car to a local food bank. Instead of selling the car right away, the food bank decides to use it for six months to deliver food to local families in need. After that six months, the food bank decides to sell your car for $800. Instead of only claiming the $800 as a deduction, the IRS will allow you to claim the full value of the vehicle since this is deemed as “significant intervening use” of a vehicle.

Writing the Car Off

To successfully donate car for tax deduction, you’ll have to write them off at the end of the tax season. If your car was worth more than the $500 value, you’ll have to itemize your deduction rather than using the standard deduction. Using a Form 1040 and Schedule A, this is where you’ll list the value or sales price of the car.

Remember that when you donate car for tax deduction purposes, you’re not necessarily going to save that exact amount on your tax bill. Instead, this amount is meant to bring your taxable income down. Because of this, you’ll find that you’ll owe less taxes come tax time. For instance, using that $800 car write-off example, a taxpayer could see a tax cut of around $150 in the 25 percent tax range.