Car Insurance

If you have been in an auto accident then you will likely have to file an auto accident insurance claim. This can prove to be quite a task dealing with insurance adjusters and the things that come with it. When filing an auto accident insurance claim there are some things you should know that will prove to be essential to you.

Contact your insurance company very soon after the accident. This is the first one to call in case of injury also. Take time to read what pertains to your auto accident insurance claim when you first receive your insurance policy this will help clear up any misunderstandings before accidents happen and will give you an idea of what your auto accident insurance claim entitles you to instead of having to worry about it while your going through the trauma of an accident.

When you writing your statement include as much details of the auto accident as possible. You can reinforce your claim by taking pictures of the vehicle and any injuries that may have been sustained due to the auto accident. Take down names and numbers of any witnesses that may be able to help in proving your auto accident insurance claim when the time comes. Remember to take notes on any other persons or vehicles that were involved in this accident because this is very important to your claim.

Keep all records pertaining to your claim. Write down when you have a conversation with the insurance officer, agents or anyone else that is involved with this auto accident insurance claim. Remember to keep all the bills and receipts that you may incur during this time. It is important to be honest with your insurance company because if you are not you could be disqualified due to fraudulent reasons. An auto insurance claim has been turned down many times on these same bases.

Another important thing to remember is that you may make more than one auto accident insurance claim, so check any other policies you may be holding to verify this. Take time out to review all your policies. You may be entitled to file more that one auto insurance claim, so make sure you claim for all that you are able to claim for.

When making an auto accident insurance claim there are some things that you must remember to do. Make sure you do them all and keep records.

If you want to donate your car to a charity, you might consider doing it before December 31, 2004. A new law will go into effect in 2005 that will alter the rules for the contributions of used motor vehicles (including boats and planes). Under the new rules, if the claimed value of the donated motor vehicle exceeds $500 and the vehicle is sold by the charity, the taxpayer is limited to the amount the charity receives for the vehicle. The charity must send a notification to the donor within 30 days of the sale stating the amount of the gross proceeds.

According the Internal Revenue Service (IRS), for the remainder of 2004, taxpayers will be able to deduct the fair market value of the contributed property. The fair market value is the price the car would sell for today in its current condition. If the used car is not in good condition and needs significant repairs, do not believe promotional promises that claim you will be able to get “top value” for your car donation based on one of the latest published guides that show the average regional prices for various used cars. If you are claiming that the car is worth $5,000 or more, you will need to get an official outside appraisal in order to substantiate the claimed value for the IRS.

In order to take a tax deduction for donating a car, boat or other vehicle before December 31, 2004, there are a number of other things you should keep in mind.

* First, verify that the recipient organization is tax exempt as a charity. Taxpayers can use the IRS Web site to check that an organization is qualified by searching Publication 78. Publication 78 is an annual, cumulative list of most organizations that are qualified to receive deductible contributions. Publication 78 is also available in many public libraries.
* Make sure the title of the car is transferred to the charity’s name and keep a copy of this record.
* Find out how the charity financially benefits from the resale of the vehicle.
* For tax records, take a photo of the car and keep copies of current classified ads or guide value estimates for similar vehicles. For more deductibility information, get a copy of IRS Publication 561, Determining the Value of Donated Property.
* Check out the charity with the BBB Wise Giving Alliance at www.give.org or contact the Better Business Bureau in your area.
* If you are in doubt about whether a contribution is deductible contact the IRS at 1.800.829.4059.

Donors concerned that contributions are being solicited for fraudulent purposes should contact the appropriate state charity official, who is often located in the state attorney general’s office. A list of state charity official offices can be found online.

On June 3, 2005, the IRS released guidance on charitable
deductions for donated vehicles. The American Jobs Creation Act
(AJCA) radically changed the amount of the deduction taxpayers
can claim for their donated car.

Fair Market Value v. Actual Sales Price

When donating a car to charity, a taxpayer traditionally was
allowed to deduct the fair market value. The new law changes this
valuation to the actual sales price of the vehicle when sold by
the charity. The taxpayer is also required to get written and
timely acknowledgment from the charity in order to claim the
deduction

The AJCA does provide some limited exceptions under which a donor
may claim a fair market value deduction. If the charity makes a
significant intervening use of a vehicle–such as regular use to
deliver meals on wheels– the donor may deduct the full fair
market value. For example, driving a vehicle a total of 10,000
miles over a one-year period to deliver meals is a significant
intervening use.

The AJCA also allows a donor to claim a fair market value
deduction if the charity makes a material improvement to the
vehicle. Under the guidance, a material improvement means major
repairs that significantly increase the value of a vehicle, and
not mere painting or cleaning.

Interestingly, the IRS has also added an exemption not included
in the AJCA. On its own, the IRS has determined that taxpayers
can claim a deduction for the fair market value of a donated
vehicle if the charity gives or sells the vehicle at a
significantly below-market price to a needy individual, as long
as the transfer furthers the charitable purpose of helping a poor
person in need of a means of transportation.

If you intend to assert one of these exemptions, how do you
determine the fair market value? Generally, vehicle pricing
guidelines and publications differentiate between trade-in,
private-party, and dealer retail prices. The IRS consider the
fair market value for vehicle donation purposes to be no higher
than the private-party price.

The new provisions of the Americans Job Creation Act certainly
make it less attractive to donate a car to charity. Using the
exemptions, however, you can still create a sizeable deduction
while helping others who are less fortunate.

When donating an automobile to charity, you’ll want to think about tax deductions. According to Publication 4303, the Internal Revenue Service (IRS) and state charity officials provide general guidelines for donations.

In the case than an individual is eligible to deduct charitable donations for federal income tax purposes, there are steps that must be taken. Only if the charity receiving the vehicle is a qualified organization, can this happen. Charitable, religious, and educational organizations usually qualify.

To verify a charity organization, simply call the account services division of the IRS and see if it has tax exemption status. If an organization is located at a church, synagogue, temple, or mosque, it is not required to apply for exemption.

Some charity only allows for limited tax deductions. Your tax deduction cannot exceed 50 percent of your adjusted gross income and other limitations may apply as well. You can research a specific type of charity contribution and learn how it will affect your taxes. Generally though, the largest amount of money you can deduct from your income tax return is simply the fair value of your automobile – whatever price a person would buy it for.

It is important to take care of the vehicle’s records, as they may be required to authenticate your donation. Furthermore, if you plan to deduct more than $250, you should ask for a written acknowledgment from the charity about the donation. The document should feature the name of the charity, a description of the automobile, a statement that clarifies that no goods or services, beyond religious guidance or instruction, were exchanged for the automobile.

You must obtain this written acknowledgment on or before the due date of your return; the same year you donated the vehicle. It can be a paper copy or a mere e-mail.

As for charities, they must be available for public inspection so as to secure their tax exemption status. As well, they must provide documents that show their annual returns.

Any donation you make to help out a worthy cause can also help you with your taxes. If you have an old car parked in your garage and you don’t know what to do with it, car donation is a wonderful way to help a charity. Although the car donation laws have changed, this is still a good way to help yourself and others too.

In 2005, the laws changed regarding tax deductions on boats, vehicles or airplanes that are valued over $500. Now, the charity must provide written documentation or acknowledgement within the 30 days of processing your donation. If the charity gives an exaggerated or false statement, they can be fined or penalized.

Under the January 2005 rules, your tax break is based on how the charity uses the donated vehicle. If the car is sold, the gross sale price can be deducted. If the charity uses the donated car following the new law for “significant” charity work that is tax approved, you’ll be able to deduct the market value of the vehicle. However, some stiff penalties will be charged for falsified documents. The law is watching carefully those charities not following the rules and regulations involved with car donation.

Even though the old laws had some problems, many charities are skeptical about the new car donation laws. A lot of organizations are concerned about what might happen when the responsibility of tax deduction is put under the authority of the charity rather than the donor. Some of them have actually sent a letter to the Treasury Secretary that suggests that people may be discouraged from donating cars if they aren’t aware of the deduction amount that will be allowed. This, they fear will mean that some donors will be lost. Charities feel that donors must be able to weigh the cost of benefit in order to know if it is enough for them.

If you do decide to pursue car donation, you will find out that the process is easy. You can contact most charities by phone or online. It is important to ask the charity you wish to get involved with for some specific and important information. This is necessary in order to avoid complications and also be sure you understand the process. It’s not hard, but does require you to fill out some important information and get the car ready.