Ten Tax Mistakes You Simply Can’t Afford

 

Updated for 2012

With the 2012 filing deadline closing in, many of us are scrambling to get in before it’s too late. Preparing your tax documents too fast is a dangerous proposition often resulting in costly oversights and errors. Here is a list of some of the most common mistakes people make when filing. Here’s hoping it saves you from a headache or two!

1. Forgetting to claim a car donation deduction:

If you donated a car in 2012 to a reputable car donation charity, you don’t want to forget to claim that deduction. Not sure if you are eligible or what information you’ll need to provide? Kars4Kids has created a handy Accountants Guide to Car Donation which is easy enough for the average person as well.

2. Forgetting the stamp on your envelope:

Thousands of people every year completely forget the stamp when mailing out their return, or they remember the stamp but use insufficient postage. Luckily, a return that’s a little late will usually incur no more than a small penalty. From Investopedia’s, Personal Income Tax Guide.

3. Forgetting to sign your return:

Another common mistake is forgetting to sign your return. Unsigned returns are considered by the IRS as if they were never submitted, and the IRS may not notify you for a month or more. By then the penalties and interest may already be adding up.From Investopedia’s, Personal Income Tax Guide.

4. Green Appliances and Home Improvement:

There are many home improvements that are eligible for a tax credit. Things like energy efficient new windows, roofs, HVAC systems and many other improvements may be eligible. Don’t forget to file for this credit. See Energy Star for more details.

5. Filing correctly for those home improvements:

If you will be filing for home improvements, Houselogic warns that some items can be very complex to file for, after you’ve come this far you don’t want to lose out on this credit because of a simple filing error. Read the directions carefully.

6. Environmentally friendly vehicles:

Tax breaks are available for those who purchased an electric vehicle or a plug-in-hybrid in 2012, don’t forget to maximize the benefits of being a good friend of the planet. From efile.com.

7. Federal student loans:

Payments made on federal student loans last year may be eligible for a tax deduction using Form 1098-E. Students of the world, this is your big chance, don’t blow it! More info at ed.gov.

8. Private Mortgage Insurance:

If you bought your house with a down payment of less than 20% you were probably required to purchase private mortgage insurance. If your adjusted gross income is less than $109,000 you may be able to deduct those payments, which can add up. Source and more info at Houselogic.

9. Political Tax Credit:

States like Oregon allow you to claim a tax credit for contributions made to a political group. Check if this credit is available in your state as well. If it is, it’s like free money.

10. Save money with free online filing:

If you want to save more money, file online for free. Two of the more popular tools are Turbo Tax, and H&R Block.

Accountants Guide to Car Donation

 

It’s that time of year again! The time of year when your clients are calling you trying to dig up any possible tax deduction they can before 2012. For many people car donation will be a wonderful option to ease the pain a little when filing. Kars4Kids has prepared this handy simple little guide to get you the answers you need fast. Feel free to download, print, share or even embed this guide on your site. To read the guide visit the car donation guide pdf or just click on the image below. Then, use the social sharing buttons above to spread this great reference, print it out for your clients (feel free to add your company logo), and copy the embed code below for your blog or website.

Accountants Guide to Car Donation

Or, embed it on your site for your client’s convenience
<div style=”text-align: center;width:500px;”>
<h3>The Accountants Guide to Car Donation</h3>
<a href=”http://www.kars4kids.org/blog/wp-content/uploads/2011/12/accountants-guide-to-car-donation.pdf”><img src=”http://www.kars4kids.org/blog/wp-content/uploads/2011/12/Car-money-small-2.jpg” title=”Accountants Guide to Car Donation” alt=”” width=”448px” height=”299px” /></a><br/>
Guide produced by the Kars4Kids <a href=”http://www.kars4kids.org”>car donation</a> program
</div>

Special thanks to Gail Perry of Accounting Web, James Edward Maule of Mauled Again, Nicholas J. Pennewell of Tampa Bay CPA, Tom Selling of The Accounting Onion, Trish McIntire of Our Taxing Times, and a special shout out to W. Michael Hsu of DeepSky, for lending their time and advice to help create this guide. Thanks!

How many cars were recycled last year? [Infographic]

November 15th is America Recycles Day. In that spirit, we’ve created this beautiful Infographic to illustrate some statistics about car recycling in the US.
Millions of cars are recycled every year in the United States, the metal, plastics, tires, glass, and other materials going to create thousands of new products. Did you ever wonder how many cars are recycled every year, what materials are recycled, and what can be made out of those materials? This handy Infographic is all you need to learn everything you ever wanted to know about car recycling. Check it out and then grab the easy embed code.



Cash for Clunkers versus the car donation industry

When the Cash for Clunkers program was first announced by the Obama administration in 2009, many news sites, blogs, and car industry related websites, wrote articles predicting the effect the program might have on car donation charities.

Two years later, we’ve gone back and dug through our data to answer the question. The results are pretty dramatic.

Did Cash for Clunkers have a negative effect on donations of vehicles to charities?

In order to accurately portray the numbers, it is important to point out that car donations have been dropping dramatically in the last two years as a result of two important factors. The first is the downturn in the economy. Consumers are holding on to old cars a little longer, perhaps spending a little more at the mechanic and a little less at the car dealer. The second factor is rising metal prices which causes people to sell their car directly for parts or for recycling rather than donating it.

We have taken the top ten cars cashed in for the Cash for Clunkers program and calculated the percentage of those vehicles for total donations in the years 2008, 2009, 2010, and 2011 up until September 23rd.

According to U.S. News the top ten cash for Clunkers trade ins were:

  1. 1998 Ford Explorer
  2. 1997 Ford Explorer
  3. 1996 Ford Explorer
  4. 1999 Ford Explorer
  5. Jeep Grand Cherokee
  6. Jeep Cherokee
  7. 1995 Ford Explorer
  8. 1994 Ford Explorer
  9. 1997 Ford Windstar
  10. 1999 Dodge Caravan

Because the program took place in 2009, we would expect donations of these vehicles to begin to drop off in 2010, the next year. However, as can be plainly seen from the following chart, 2010 showed only a very small drop of less than .004%, statistically – zero.

Cash for Clunkers car donation year to year chart

But one important number does stick out. Donations are expected to rise as these cars age. In fact, in 2011, the percentage jumped by almost .3%, a pretty substantial amount. And in 2009, we saw a jump of over .2% in the percentage of donations of these specific vehicles.The 2010 numbers are not significant because of what happened that year, but rather because of what didn’t happen. 

More importantly, after running some numbers on the cars.gov trade in vehicles report, which can be downloaded here, we’ve calculated that almost 85% of trade ins were domestic made cars. And our numbers clearly reflect a severe drop off of domestic car donations in 2010 and even deeper in 2011 to date.

Percentage of American made cars donated

These numbers show a clear dramatic drop in car donations as a direct result of the Cash for Clunkers program.

Car donation experts

Car donation. People are always looking for good information on the topic, and trusted sources that can tell them what they should be looking for and what they should be asking before they donate their car.

Here is a list of trusted writers that Kars4Kids recognizes as industry experts on  car donation, along with the articles they’ve written.

1. Jerry Edgerton Jerry Edgerton

   Jerry covers cars and money for Moneywatch.com . He is also the author of Car Shopping Made Easy  – How to get the car you want at the price you want to pay. He has written this great article called Car Donations: Beware scams and Tax Pitfalls.

2. L James JohnsonL James Johnson

   L James Johnson is the primary writer for the High Gear Media website BestCarBuyingAdvice.com. His book HELP! I gotta sell my car NOW!: New rules for selling your vehicle online is described as “The only comprehensive guide for selling your car online”. He has written an excellent article about car donation entitle Donating your vehicle to charity.

3. Lauren Fix Lauren Fix

   Lauren Fix, also known as ‘The car coach’, has appeared on many TV shows, written two books, and won enough awards to sink a small ship. She is an expert in all things automotive, she provides solid information on safety, and a wide range of automotive topics and issues. She has written a seminal post along with a video on the topic of car donation.

4. Laura T. CoffeyLaura T. Coffey

   Laura T. Coffey is a writer, editor and producer for Today.com, writing  a column called 10 Tips for keeping your money in your wallet. In 2008 she also wrote this great article entitled How to donate a car or boat to charity.

Car donation – Why I did it

Our 2003 Buick Century was never what I would call a beautiful car. Dark blue, almost purple in fact, with enough dents to make it look like part of the design scheme, “bumpy style” I called it, it wouldn’t win a ribbon in a car show. It probably wouldn’t even be allowed in a car show. The taped over shattered back light with the peeling tape probably wouldn’t help either. After 5 years together though, we were quite attached to Herbie, as we called him, after THE Herbie which for some reason we felt was appropriate – something about the Century just hearkens back to that original Volkswagen Beetle, and parting from him was somehow sad. Not that we would miss the loud grinding noise from the gears when putting him in reverse, or the stuffed vacuum cleaner – reverse jet engine like crescendo that rose from the car if you dared push on the gas pedal, we would not miss that at all. We will miss Herbie though, as our first car, he has a lot of memories in him, encrusted on the carpeting in the form of cheerios from that family trip we took to Detroit, as a sticky fruit punch stain on the back of the drivers seat from that great Philadelphia vacation, and as a pervasive odor of sickly sweet apples from that rear-view mirror deodorizer that we got in Washington DC. Come to think of it maybe I’m better off without those ‘memories’ infecting my life and my nasal passages.

Herbie has had quite a number of physical ailments recently. First his back light got smashed as I mentioned above. Smashed by a kid on a bike, rode right into the back, how embarrassing is that? He will be sitting in a junkyard somewhere and the tough ’89 LeSabre across the way will ask him where he got that nasty wound, and instead of grunting “nam, 57th airborne”, he’ll mutter “kid, on a bike, long story”. Ah, the difficult social conundrums of junkyard life. Then he’s had chronic issues with his catalytic converter, a part I didn’t know existed until I saw the bill for the replacement part. Ouch. Then the mechanic tells me that my car is ruining catalytic converters so it’s not his fault that it died again. Ha! Mechanics can get away with telling me anything. And of course there is the oil leak, transmission fluid leak, and a crack somewhere in the mysterious part of the car called by insiders “the shocks”.

Then there was the odometer episode. The odometer died. It had been kind enough to last until 100,000 miles, so I could snap a picture of the momentous occasion while cruising down the eighty (not recommended), but now it was dead. Kaput. No big deal, right? Wrong. I needed to pass inspection, I needed an odometer. So I bought a used one. That came with an extra 50,000 miles built in over the approximately 105 K that had been on the original. I guess it only would have been a big deal if I had resold the car, now that I opted for car donation, no harm done, huh?

In the end it was the oil leak that did him in. Too much to repair it, just not worth it. I could have sold him for junk or for parts, but I decided on car donation. Here’s why. I did a quick Google search for “junk car cash [my city]”, try it on your city, the results were truly scary. It was either some toothless vagabond in a beat up pickup truck with the metal tied down on top with some large rubber bands, or Vinny, yeah, that Vinny. Seriously, it was like a bunch of used car dealers got thrown out of the used car dealership business for being too sleazy and opened up scrap metal businesses. Like sleazy to the 10th power. So I donated my car, got free towing, quick and easy, and a tax deduction for the car donation. Plus I know that Herbie will now be responsible for bringing happy memories into the lives of others. And not the stick fruit punch stain kind.

Car Donation – The why’s, what’s, where’s and how’s

Testing, testing, one two three. Woot! We are live!

Welcome to the brand spanking new Kars4kids car donation blog!

And what better way to begin than with a break-it-down, nit-picking, deep digging explanation of car donation?

The Why’s

Why on earth would I donate my car?! I mean seriously! The truth is most people are just looking for a convenient and fast way to get that hunk of junk out of their driveway to make room for those shiny new wheels. Your options are limited. You could call the junk metal guys and hope that the guy who shows up isn’t a shotgun toting troglodyte in a broken down pickup truck held together by duct tape and wire hangers with a penchant for ‘forgetting’ to pay. Or a cousin in the mafia for that matter. Or, you could donate your car to a respectable charity, and have the vehicle picked up by a local, reputable tower, receive a receipt on the spot and a tax deduction in April. Now that will bring a smile to your face.

Well why do you want my broken down car anyways? And why on earth would you tow it for free? And why oh why does your logo have a kid driving a car? Woh! One at a time question asker guy! Kars4kids wants your broken down car because we can sell it and direct that money to our affiliated charities. Why would we tow it for free? Because we make money off of your car, why should you pay for us to make money? I mean if you want to…. Oh you mean Mikey! Yup that’s his name. He’s our mascot. Don’t try that at home kids.

The What’s

So what do we do with your car? It really depends on the age, model, and condition of the car. If a car is all used up, doesn’t drive, doesn’t turn on, doesn’t have a roof, etc… it will usually be sold for parts or for scrap metal. However, at Kars4kids we do everything possible to try to get the most value out of every vehicle we receive and that usually means selling the car at auction. We use large reputable auction centers around the country to resell many of our donated vehicles at the highest possible price, ensuring that our charities enjoy the maximum possible return from your donation and that your tax deduction is as large as it can possibly be.

What kind of donations do we accept? We accept vehicle donations, RVs, boats, trailers, motorcycle, jet ski, bus and snowmobiles. Basically, pretty much any machine that moves. Although we do not accept jet engine powered toaster ovens.

The Where’s

Well just about anywhere that’s where. We have a network of towers across the United States so with one call to our central headquarters in New Jersey we will have a local tower in your area pick up your car in a prompt and efficient manner. Often, people do not realize that car donation is not nessecarily a local-centric industry. In fact, many car donation charities can accept donations from anywhere in the United States.

 

The How’s

How? Call us. 1-877-Kars4kids. Or use our online car donation form.