BY MARK SCHWANHAUSSER
KNIGHT RIDDER NEWSPAPERS

February 26, 2006

Americans opened their wallets to help people rebuild their lives in the aftermath of the devastating hurricanes of 2005: Katrina, Wilma and Rita.

The year also was remarkable for how swiftly lawmakers approved two, late-year tax bills containing dozens of generous tax breaks. Taxpayers will be rewarded for giving king-size cash donations, sheltering storm victims or just driving their cars on behalf of a charity.

“The unique thing about both of the disaster acts is you do not have to be a victim to somehow be affected,” said Mark Steber, vice president of tax resources for Jackson Hewitt Tax Service.

As a result, qualifying taxpayers can:

Deduct up to 100 percent of their adjusted gross income for cash contributions they gave to certain charities from Aug. 28 through Dec. 31, even if the charities had nothing to do with hurricane relief. The limit is normally 50 percent.

Claim an exemption of $500 for each Katrina victim they sheltered at least 60 consecutive days, capped at $2,000 per household. Unlike personal exemptions, these will not be erased if you owe alternative minimum tax.

Double the write-off for miles they logged in their cars to provide Katrina relief on behalf of a charity. Though the rate for mileage associated with general charitable activities remained locked at 14 cents, the rate for providing services solely related to Katrina jumped to 29 cents from Aug. 25 through Aug. 31, then to 34 cents for the final four months of the year.

Taxpayers normally can take a charitable deduction only in the year they make a donation. In the wake of the devastating tsunami in Southeast Asia, however, Congress gave donors the choice of writing off cash donations in either 2004 or 2005, even if they didn’t cut the check until January 2005.

Check your tax returns if you donated cash last January. Weigh whether you’d come out ahead by taking the deduction on both federal and state returns for 2004 or 2005, or whether you’d save by taking it for different years on the two returns.

Whatever you do, though, don’t try to double-dip by claiming the deduction two years running.

As generous as these tax breaks are, many unsuspecting American donors will feel shortchanged in 2005. That’s because the Internal Revenue Service now requires more proof to ensure donors don’t inflate the value of noncash contributions like clothing and cars.

Read the rest of this story here and support newsday.com

Help asthmatic children breathe a little easier by donating your used car or boat to the American Lung Association of Massachusetts. It’s a simple and convenient way to support the American Lung Association and the work it does to help the hundreds of thousands of Massachusetts residents living with chronic lung disease such as asthma, emphysema, and chronic bronchitis. All it takes is one quick toll-free phone call to 1-800-577-5864 and the American Lung Association will send a packet of information about the process.

Once you’ve decided to go ahead with the donation, a tow truck can be sent to pick up your car or boat at no cost to you. By donating, people have the opportunity to part with their used vehicles and possibly receive a tax deduction while the American Lung Association of Massachusetts gets continued support for its lung disease research, advocacy, and community education programs.

Every year hundreds of cars and boats are donated through the American Lung Association vehicle donation program. “This program makes it practical for people looking for a tax break,” said Jeffrey Seyler, CEO of the American Lung Association of Massachusetts. “The American Lung Association picks up the car or boat at no cost to the owner and at the same time, the donated vehicle provides support to the American Lung Association’s programs. It’s a win-win situation for everyone.”

Read the entire story here..

Technorati : car donation

Technorati : car donation

A good deed car donation turns into a deduction disaster when the vehicle’s owner is told it’s only worth $12 50. So she asked Help Me Hank to take on the taxing problem.

You’ve got three choices when its time to dump your wheels: sell the car, trade it, or give it away.

When Suzanne Okerfelt’s daughters left for college, she didn’t need their 90’s era clunker, like this one, anymore. So Suzanne decided to give it away to charity.

Suzanne Okerfelt
“Here was our opportunity to make a small difference to someone.”

The car was 11 with a lot of miles, but in good condition.

Suzanne Okerfelt
“We had the engine replaced, a new stereo, it had a remote start, new tires.”

Being a teacher, Suzanne knows all about homework, so she did hers on the right place to donate the car and how much it was worth.

Suzanne Okerfelt
“We’d been given an estimate of about $500 to $700.”

The wheels of Suzanne’s donation were in motion and it was win win. The charity gets a gift. The Okerfelts get a deduction.

Suzanne Okerfelt
“I would be foolish to say that we weren’t going to include it on some level in our taxes.”

Soon a tow truck came. Soon after a thank you note from the charity arrived for the Okerfelts donation of $12.50.

Suzanne Okerfelt
“I showed it to my husband. He said no that’s got to be a mistake.”

Suzanne was devastated that both the charity and her family came out as losers.

Suzanne Okerfelt
“And that’s when I said I’ve got to make someone aware of it.”

What we are aware of is that starting last year, there are new rules about tax breaks for car donations.

We called the IRS tax gurus to find out what that meant for Suzanne.

Turns out that Suzanne’s car was sold to a junkyard for $50. The donation place then subtracted its fees. The remainder was just $12.50. And the new rules say that’s the tax deduction.

View the full car donation story and support WHDH-TV Boston here!