How to Donate your car to Charity and save money on your taxes

The Vehicle Donation Processing Center, Inc., reminds taxpayers that the last extension for filing 1040 tax returns ends October 15, 2010, for the 2009 tax year. Taxpayers with open extensions can still claim a 2009 car donation tax deduction if they chose to donate a car in 2009 through the Vehicle Donation Processing Center. All they need is the receipt they obtained when making the auto donation. Sometimes the receipts become lost or misplaced between the date when one chooses to donate a car and the actual tax return filing. If that's the case, the Center will gladly replace any receipts issued.

This is also a good time to think about 2010 taxes, and donate a car," says Harvard E. "Pete" Palmer, Jr., cofounder of the Vehicle Donation Processing Center. Taxpayers can donate a car (or other vehicle, such as a truck, RV, or boat) before December 31, 2010, and receive a charitabletax deduction on the tax returns due next April. The Vehicle Donation Processing Center handles all aspects of the auto donation, including DMV paperwork, pick-up and tow from the car's current location by a qualified, highly insured, transport company to the point where it will be liquidated on behalf of the charity or in a minority of cases, used by the donee organization, itself, for charitable good works in conjunction with their mission statement. More typically, the donated vehicle is auctioned to the highest bidder and the Vehicle Donation Processing Center directly delivers the charity portion of receipts to the nonprofit.

Palmer emphasizes that the vehicle does not have to be running in order to qualify for the deduction; in fact, 60 percent of cars donated through the Vehicle Donation Processing Center no longer start up for their owners. The Center rarely turns down an offered car donation. Motorists who have suffered from a large variety of degradations, including dead batteries, smelly interiors, less than super safe conditions on the road - on top of trying to get rid of it on Craigslist or on some supermarket billboard - where they get no interest - these folks are often very grateful to the Center for dispatching the tow truck, that same day or next day and taking clunkers off their hands. Junk car owners should also remember that when they donate a car through the Processing Center this is an activity that benefits a charity and bingo, no question about it, this donation entitles all itemizing taxpayers to the car donations tax deduction on their IRS Form 1040. In addition, the vehicle donors can receive a free vacation voucher when they make a car donation. What may have felt like an albatross to the car owner creates a cash boon, when combined with other generous donors' help. One of the 400+ charities represented by the Center can then better serve their constituencies. While the amount may be small, individually charities gratefully receive every dollar they get and the tax code rewards the taxpayer's generosity just as if she or he had donated cash.

Since its inception in 1996, the Vehicle Donation Processing Center has helped taxpayers and charities, large and small, with more than 800,000 auto donations. That adds up to $60 million in net receipts for the more than 400 charities it serves, as well as substantial tax savings to itemizing taxpayers who have made car donations. In addition, the recipients of the charities' invaluable services get the ultimate benefit. Donating a car is a win/win/win proposition.

Prior to 1986, car donation did not have its own section in the IRS, chattel, charitable deductions code. Quite wisely, in Palmer's view, the Congress and Pres. Reagan, who signed the legislation toward the end of his second term, wanted to help charities expand their funding and felt that better organized car donation programs would prove to be fruitful for many in the public who would donate a car or other vehicle. At first, charities struggled with how to process the donations generated by the new law. Small charities, in particular, found it expensive and inefficient to arrange pick-up, complete paperwork, and convert the vehicles to cash. The Vehicle Donation Processing Center and other agencies stepped in to take the burden of processing these unusual donations off the charities' shoulders. Charities knew how to have a gala ball to encourage their followers into donating cash. Turning a rusting, non-running hulk of leaking steel, fabric, plastic,glass, acid and who knows what into real cash funds, is a wholly different matter.

The Vehicle Donation Processing Center's, Pete Palmer, encourages late filers not to forget to claim their deduction when filing on or before October 15 - the final - final extension deadline for 2009 individual tax returns. Palmer, in recalling the famous old saying that taxes never end, also reminds taxpayers at large to donate cars before the end of December in order to take that auto donation tax deduction on their 2010 returns, initially due next April 15.

A post of articlebase, written by Tom Tupa and guess by Shaheen Institute.