Boat Donation Wisconsin
Is it time to send your boat off into the sunset or trade up to a newer model?
Looking to save docking fees for the winter on a boat you no longer want?
If so, consider donating it to help at risk youth and families turn their lives around. How? When you make a boat donation in Wisconsin to Rawhide Boys Ranch, 83% of the proceeds directly fund programs that help troubled youth change their lives. And you get a tax deduction for your donation.
Bart Starr helped found Rawhide in 1965 and has been an active participant ever since. In fact he may have been the first vehicle donor when he raffled off his 1968 Corvette that he won as MVP. It raised around $60,000 for Rawhide that year. You can help continue Bart s legacy by donating your used or unwanted boat.
3 Easy Steps for Making a Boat Donation in Wisconsin
- Fill out the form on the right for a boat donation in Wisconsin; it takes about 1 minute to complete.
- We will arrange a free pickup service at your convenience.
- Say hello to your tax receipt.
Benefits of Wisconsin Boat Donations to Rawhide
- 83% of donation proceeds directly fund treatment programs for at risk youth
- Receive a tax deduction to lower your taxes
- Make a difference in your Wisconsin community
- We arrange a free boat pickup service for you, so that donating your boat is never an inconvenience
Your donation will fund Rawhide treatment programs that help at risk youth and families turn their lives around.
Rawhide offers a full continuum of programs and services that provide prevention-based programs for youth and families, and includes more intensive residential services for at-risk young men. Rawhide staff is caring, professional people who are committed to achieving positive outcomes for every youth or adult we serve.
The Myth of the Tax Deduction – The Simple Dollar #tax #deduction #for #donating
The Myth of the Tax Deduction
Most of the time, when I talk about the implications of various debt repayment options on The Simple Dollar, I utterly ignore tax deductions.
This is not an oversight. Usually, it just makes a situation needlessly more complicated and takes the simple out of The Simple Dollar.
As is often the case, astute readers email me about this. John, for instance:
Your advice about ordering debts is really way out of line. You should pay off your home mortgage last so you can take advantage of the tax deduction.
Yes, tax deductions can be useful in some situations. Most of the time, though, they re not much of a help and if you overvalue them, they ll end up costing you in the long run.
First of all, most people don t do deductions at all. 70% of tax filers simply use 1040EZ or 1040A for their tax returns, which means that they re simply taking the standard deduction on their taxes.
If you re doing that and 70% of you are then you re not claiming a tax deduction for your mortgage or for a lot of other things. The tax implications of whether to pay your mortgage off first or another debt off first means nothing at all.
Beyond that, some of the 30% who do file the full 1040 do so for self-employment reasons and still claim the standard deduction, putting them in that group that is unaffected by deductions.
In a nutshell, if you take the standard deduction, you re not counting your home mortgage as a deduction, and most Americans are taking the standard deduction.
Second, even if you do claim the deduction, it s not as enormous as it s often made out to be. Let s look at the projected income tax brackets for 2010 and also assume that we re talking about the average American family, bringing in $66,000 this year with two adults and two children in the household.
This income level puts that family in the 15% tax bracket. This means that if the family were to file long form and itemize their deductions, they would only deduct 15% of their annual mortgage interest from their taxes. In other words, the effective interest rate on their mortgage drops by only 15% when you take this into consideration. A 6% mortgage effectively becomes a 5.1% mortgage, in other words.
But it s even worse than that.
To actually get that full 15%, you have to actually have other itemized claims that add up to more than the standard deduction for your family. The standard deduction for that family is $11,400. So, to get the full value of that 15%, a family filing with itemized deductions has to top $11,400 in deductions before including their home mortgage at all.
Let me show you what I mean. A couple filing jointly has a standard deduction of $11,400. They have $3,000 in various deductions and $10,000 in mortgage interest, so they re going to file long form and itemize.
In the end, though, they re only deducting $1,600 more than they would have with the standard deduction ($13,000 vs. $11,400). Even if you re generous and say all of that money came from the mortgage, that s still only a small deduction. If they re in the 15% tax bracket mentioned above, they re only saving $240 by filing long form. That s the equivalent of dropping their 6% mortgage rate down to only 5.856%.
Here s the truth. For almost all families, cash flow is much more of a day-to-day concern than tax deductions. It s much more important that you have a low monthly debt load than it is to maximize your tax saving. With a high monthly debt load, you run the risk of going into more debt because of emergencies, and even a little bit of consumer debt taken on to handle those emergencies can quickly devour your savings from your deductions (and a lot more).
So, unless you re very well off and have a strong monthly income, worrying about tax deductions and their impact on your day-to-day life is a bit of a moot point. It doesn t save you all that much even if you do everything perfectly, and if doing everything perfectly means having a lot of monthly debt payments, you re introducing a lot of risk into your life for relatively little reward.
Of course, credit card and mortgage marketers prefer that you re in the latter situation. The more debt you re in that you can handle and keep making the payments, the better off those big banks are because they re just sitting back and collecting the interest off of you. Thus, they ll talk up the tax advantages of various debts as much as they can, trying to make them sound like the greatest thing in the world.
You re far better off having a small debt load and perhaps missing a deduction or two than having a high debt load and getting those deductions. The latter situation puts your whole financial house at risk because if an emergency occurs, you ll have a very hard time meeting the monthly bills.
If you have a strong income, and are in a situation where you re claiming lots of deductions anyway, it does become a factor, but if you re in that situation, you re in a very lucky and rather small minority of the American public.
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What to Expect from a Car Donation Tax Deduction
A car donation tax deduction can be confusing. Lots of charities tout a car donation charity tax write-off as a great way to benefit from helping a nonprofit organization, but too often, those looking for a tax write-off don’t really understand the kinds of tax breaks offered by the IRS.
Old Laws No More
The former car donation tax law stated that people who gave their car to charity were allowed to deduct the fair market value of the car from their tax return. It required that they do a little research to find out the value of the vehicle. Under a tax bracket of 33 percent, donating a car worth $3000 meant $1000 off of the taxes. This was reason enough for over a million people per year to make this type of donation. However, people began to deduct not only the fair market value, but the suggested retail price of the car in question. Thus, if the car was worth $3000, but a retailer would mark it up to $4500, the bigger number became the deduction. Needless to say, this tax law has been changed.
New Car Donation Tax Law
Because of this, the tax law was changed in 2005. Cars that are worth more than $500 may only deduct the charity’s actual selling price. This means that when you donate a car to charity and they sell it, whatever they sell it for is what you may deduct. If you donate a car that is worth $2000 to a charity, and they sell it for $900, you are only allowed to deduct $900 from your taxes. As an exception, if it sells for less than $500, you may deduct $500 from your taxes provided the charity meets IRS qualifications.
3 Popular Charities that will Maximize your Tax Deduction
Statement of Actual Sale
In order to receive the deduction to the value of the charity’s selling price for the car, you must attach a copy of the bill of sale to your deduction form. The charity has 30 days to send you that copy by law.
Limitations on Acceptable Charitable Organizations
Not all nonprofits or organizations are legitimate car donation venues. IRS documentation provides guidelines on what kinds of charities are legitimate parties for a car donation tax write-off.
Gross Proceeds and Value Limitations
Another huge limitation on the actual tax deduction that you can take from donating a car relates to the specific use of the car by the organization you donate the vehicle to. According to IRS rules, the maximum value you can deduct is usually the price at which the charity resells the vehicle. In other words, regardless of the market value on your vehicle, you typically need to wait until the charity is able to resell it, and then only claim that amount as a tax deduction.
Itemizing Tax Deductions
On a 1040 annual income tax return, there are two options: itemized or standard deductions. Many households opt for the standard deduction, and in this case, your car donation cannot be factored into your tax deduction at all. You only get a charity tax write-off for your car if you itemize deductions. Because the standard deduction is several thousand dollars, some of those who are donating lower value vehicles find themselves with no applicable tax deduction at all when they go to file a tax return.
What You Save
If someone who donates a car to charity is able to get a legitimate tax deduction, the amount of money they save is limited to their tax percentage on the value that they deducted. This kind of charitable write off is better for independent contractors and similar workers, who pay double what regular employees do on Social Security taxes on their income. Individual households have to look at their own particular tax liabilities in the year of their car donation to see what kind of savings would result from handing their vehicle over to a local charity.
Claim Full Market Value
There is, however, a way to still deduct the full market value of your donated car. If you give the car to a charity that furthers their charitable aim with that car rather than sell it, you’re able to deduct the full market value. In other words, if the charity to which you give the car turns around and gives that car to a person or family in need, the full market value can be deducted from your taxes.
3 Popular Methods of Car Disposal
Results of the New Changes
Obviously, these tax law changes benefit certain parties and not others. The lower value for tax savings deters some individuals from donating vehicles all. Others seek out public nonprofits that use the vehicles rather than reselling them.
Some conventional charities who rely on the resale of vehicles for raising funds have complained about the tax law changes, saying that it makes the car donation process unappealing because car owners don’t have a value for a tax reduction at the time of donation. These charities argue that having various concrete values helps families make decisions about what they would do with a vehicle.
How to Setup Your Nonprofit for Car Donations
How does a non-profit set up a car donations program? It is important to understand the process before getting involved. Some charities contact fundraising companies to handle the entire project and then collect a percentage once the cars have been sold to auction or scrapped at the junkyard. If choosing a third party fundraiser to handle the project, beware of those in the business for making money off of the process and giving the charity a less than charitable cut of the proceeds. Any third party broker should have sound references. They also should be able to quote the percentage of the proceeds that will go to the charity organization.
For those non-profits that wish to tackle the project themselves, the first requirement is a plan establishing resources and benefits necessary for a successful venture.
Resources for a Car Donations Program
- Access to a towing service for picking up donor vehicles and a dispatcher to transport them to auction.
- Volunteers or staff to handle paperwork relating to obtaining the title and transfers of ownership.
- A process for liquidating the vehicle by selling it to an auction.
- Internal accounting expertise to track tax records for sales and handling donor’s receipts.
Questions to ask before Starting a Car Donation Program
- Should distances from the non-profit have a stipulation?
- What about vehicles that is over twenty years old?
- What are the costs associated with overhead services, phones, transportation and gas, for example?
- Titles are often handled by mail, how long is this title process?
- Where will the vehicles be stored until they can be sold or disposed of?
- What is the turnaround time for selling vehicles and does it vary based on the age or model of the car?
The decision to start a car donation program is a wise one, since a great portion of consumer wealth is tied up in pre-owned goods. The majority of charities spend 92 percent of their time and energy marketing and advertising for funding to keep the organizations up and running to help others. A non-profit could benefit greatly by transferring these fundraising resources in-house to set-up and run a car donations program. Cash donations are becoming increasingly difficult to solicit from willing donors. Accessing funding from assets already in the consumer’s hand, such as older cars, is an easier choice for donors to support.