#CAR INSURANCE:

CAR DONATION 3

Step 4: Gather necessary documentation
The documentation you’ll need to claim your deduction
is dependent on the amount of the deduction.
=$500
For a deduction of $500 or less, the IRS requires:
- the name of the charity
- a description of the donated vehicle
- a statement if goods and services were
received, and their value.
Quick tip: This information is usually found on the receipt
issued by the charity. If you donated to Kars4Kids,
your official receipt is all the documentation you will need
in this case.
$500-$5,000
For a deduction of more than $500 and less than $5,000,
the IRS requires:
- the name of the charity
- a description of the donated vehicle
- a statement if goods and services were
received, and their value
- Copy B of Form 1098-C OR a legal substitute
- If you are e-filing, Form 8453
Quick tip: The receipt issued by the charity may be a legal
substitute for Form 1098-C. Kars4Kids’ official receipt
is a legal substitute for Form 1098-C and can be used to
input all necessary information asked for by tax software
from the 1098-C.
>$5,000
For a deduction of more than $5,000,
the IRS requires:
-IRS Form 8283
-Form 1098-C or legal substitute (such as the
receipt from the charity)
-a written appraisal of the vehicle’s value.
The appraisal must be from a qualified appraiser
and must be completed no more than 60 days before
the donation. The cost of the appraisal cannot
be deducted as a charitable expense, but it can be
itemized in miscellaneous expenses.
Step 5: File tax return!
The tax deduction can be claimed in the year that the
donation was given. Don’t forget to include all the necessary
documentation, as outlined above, with your federal
income tax return. Whether your car donation qualifies
for a deduction on your state income tax return varies on
a state-by-state basis. Check with your state tax department.
Note: The tax benefit you receive for donating your car is
a deduction, not a tax credit. This means that the amount
of income that the government will tax you on is reduced
by the deduction amount, resulting in lower taxes for you.

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#CAR INSURANCE: CAR DONATION TAX DEDUCTION

CAR DONATION TAX DEDUCTION

Step 3: Determine the amount of
your deduction
The exact amount of your deduction is dependent on
what the charity does with your vehicle and on the vehicle’s
value. Let’s break it down.
IF THE CHARITY… YOUR TAX DEDUCTION
IS…
Uses the vehicle for its own
purposes (such as delivering
food to the needy or giving
it to a needy individual)
the fair market value of
the vehicle.
Junks the vehicle or sells it
for less than $500
the fair market value of
the vehicle up to $500, as
determined by the donor.
Sells the vehicle for more
than $500
the full final sale price of
the vehicle.
Now, for an important definition: what is the “fair market
value” of the car?
Fair market value is defined as “the price at which the
property would change hands between a willing buyer
and a willing seller, neither being compelled to buy or sell,
and both having reasonable knowledge of all the necessary
facts.” In other words, the price you could reasonably
expect to get for the vehicle on the open market. This is
not necessarily identical to the “blue book” value of the
car, as factors such as engine or body trouble or excessive
wear could decrease the vehicle’s value and significant
improvements might increase the value.
Quick tip: You can use a vehicle pricing guide such as
this one from Kelley Blue Book to determine your car’s
value based on its current condition.
Step 4 (cont.)
If you are claiming the fair market value of a vehicle that
will be used by the charity for its own purposes or the
charity will be making material improvements to the vehicle,
the IRS also requires written acknowledgment from
the charity describing how the vehicle will be used or improved
and certifying that it will not be sold before said
use or improvement. The IRS Guide to Vehicle Donations
for Donors explains this in more detail.

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#CAR INSURANCE: A Donor’s Guide to CAR tax

A Donor’s
Guide to CAR tax

If a tax deduction is an
important consideration
for you when donating a car
to a charity, you should check out the
charity; check the value of your car; and
see what your responsibilities are as a donor.
Through this Publication 4303, the
Internal Revenue Service (IRS) and state
charity officials provide general guidelines
for individuals who donate their cars.
A companion brochure, Publication 4302, A Charity’s Guide to Car
Donations, provides guidelines for charities that receive donated cars.
Note: This publication is not intended as a guide for corporate donors.
Selecting a Charity
If you are eligible to deduct charitable contributions
for federal income tax purposes (see Qualifying for
a Tax Deduction later) and you want to claim a
deduction for donating your car to charity, then you
should make certain that the charity is a qualified
organization. Otherwise, your donation will not be
tax deductible. The most common types of qualified
organizations are section 501(c)(3) organizations, such
as charitable, educational, or religious organizations.
This publication refers to section 501(c)(3) organizations
generally as “charities.”
To verify that an organization is a charity qualified
to receive tax-deductible contributions, see IRS
Publication 78, Cumulative List of Organizations, an
annual list of most charities. Publication 78 is available
online at www.irs.gov/eo (under the Search for Charities

topic) and at many public libraries. You may also verify
an organization’s status by calling the IRS Customer
Account Services division for Tax Exempt and
Government Entities at (877) 829-5500 (toll-free). Be
sure to have the charity’s correct name. It is also helpful
to know the charity’s address.
Not all qualified organizations are listed in Publication 78.
For example, churches, synagogues, temples, and mosques
are not required to apply to the IRS for recognition of
exemption in order to be qualified organizations and are
frequently not listed. If you have questions, call Customer
Account Services at the above number.
If you want to learn more about a charity before donating
your car, use the resources listed under Assistance
Through the Charity, Through State Officials, and
Through the IRS at the end of this publication.
Qualifying for a Tax Deduction
You can deduct contributions to charity only if you
itemize deductions on your Schedule A of Form 1040.
You must take into account certain limitations on charitable
contribution deductions. For example, your deduction
cannot exceed 50% of your adjusted gross income.
Other limitations may apply. Publication 526, Charitable
Contributions, provides detailed information on claiming
deductions and the deduction limits. It also describes the
types of organizations that are qualified to receive taxdeductible
contributions. Publication 526 is available
online at www.irs.gov or by calling (800) 829-3676 (toll-free).

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#INSURANCE: What is a co-payment?

health insurance:  What is a co-payment?

A co-payment, or co-pay, is a fixed amount that you pay for a
covered health care service, usually when you get the service.
The amount can vary by the type of service.
Total cost of office visit
Office visit
Co-pay
Hospital
Co-pay
Medicine
Co-pay
Amount
paid by
insurance
Amount
you pay
Did you know?
Have you heard of shared decision making? Shared
decision making is a process by which patients and their
health care providers make health care decisions together,
taking into account the best medical information available,
as well as the patient’s values and choices. When you and
your health care provider discuss treatment options, make
sure to consider what your
insurance will cover

What is a deductible?
A deductible is the amount you owe for covered health care
services before your health insurance plan begins to pay.
For example, if your deductible is $1,000, your plan won’t
pay anything (except for preventive services and other
excluded services in the SBC) until you’ve paid $1,000 for
covered services. (Insurance pays for covered services above
the deductible, but you may be responsible for a co-pay or
coinsurance.)

Insurance pays for
covered services above
the deductible
Deductible
Amount you pay
before insurance
begins to pay

Medical expenses
It’s important to find out what is and what is not included in

What does maximum out-of-pocket mean?
Maximum out-of-pocket is the most you’ll have to pay for
covered services in a benefit year. After you reach this amount,
your health plan will pay for all covered essential health benefits
from an in-network provider.

Insurance pays for all
covered services above
your maximum amount
Maximum
out-of-pocket
The maximum amount
you will have to pay in
the benefit year
your plan’s deductible. Check to see
Medical expenses

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#INSURANCE:health insurance? What are the different ways to get health insurance?

health insurance

What are the different ways
to get health insurance?

There are many ways to get health insurance. Here are a few:
Some people can get health insurance through
a group health plan offered by their employer
or their spouse’s employer. In most cases, the
employee and employer share the monthly cost
of the policy (the premium).
People can buy an individual health
insurance policy on their own.
Some people can buy health
insurance through the Health
Insurance Marketplace, also known
as the health exchange, which is
a website set up by the Affordable
Care Act. Available plans are broken down into 4 health plan
categories, with some available at a reduced cost if certain
requirements are met.
Some people may qualify for government-funded health
insurance, such as Medicare or Medicaid, if they meet certain
eligibility requirements.

Why is it important to
review your plan regularly?


Once you are insured, be sure to review your plan at least once
a year. Many insurance plans change their coverage benefits
and premium costs each year. You will be informed about any
changes as your renewal date gets closer. Check to make sure
that your preferred health care providers are still in your plan
and that the premium is still affordable.
You may decide to switch to another plan that
works better for you. Each year there is an open
enrollment period when people can enroll in a
health insurance plan or change plans. There are
also special enrollment periods that allow people
with a life change, such as a job loss or marriage,
to enroll in a plan outside the open enrollment period.
What happens if your circumstances change?
Life is always changing. If the circumstances in your life
change, you may have to change your insurance plan as well.
For example, if you get married, have a baby, or get health
insurance through your job and later lose or change your job,
you may have to switch to a different insurance plan, depending
on the type of policy that you have. Changing plans because of
certain life events is allowed at any time.

Understanding what your
plan might cover


To learn more about the services covered by a plan, be sure to
read the summary of benefits and coverage (SBC) for each
plan you are considering. The SBC is a short, easy-to-understand
summary of what each plan covers and the associated costs. It
can help you compare the benefits and costs of different plans.
Every SBC includes an example of what the plan covers for a
patient with type 2 diabetes. Everyone’s situation is different.
For a worksheet that can help you choose a plan, see page 40
of this booklet.

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#INSURANCE: What is health insurance?

What is health insurance?

Health insurance is a contract between you and your health
insurer to cover your medical expenses. Your health insurance
company helps pay for some or all of your medical care,
depending on the type of insurance plan you have. Talk with
your diabetes care team to find out what parts of your care are
covered by your plan.

The goals of this booklet are to:
Explain the basics of health insurance and how
it works
Point out some things to look for in a health
insurance plan
Suggest what things to consider and what questions
to ask when choosing a health insurance plan
Inform you about programs that are available to
help eligible people pay for prescription medicines
Provide resources to help you learn more about
health insurance
You will find a list of terms at the back of this booklet. If you
come across words that you’re not sure about, check the list
for definitions.

What services might
health insurance cover?

Depending on your plan, health insurance might cover:
Visits to a health care provider’s office or clinic
Preventive care, such as checkups, screening tests,
and vaccines
Hospital outpatient care
X-rays and imaging tests
Hospital stays (depending on whether the hospital
is in network)
Laboratory tests
Prescription medicines (level of coverage will depend on
whether the medicine is on the list of approved medicines)
Mental and behavioral health treatment
Diabetes supplies, such as test strips, lancets, and
blood sugar monitors
Medical equipment, such as wheelchairs
Emergency and urgent care services
Substance abuse treatment
Physical therapy and rehabilitation services
Maternity care
Home health care
Infertility treatment
Hospice care
Care in a skilled
nursing facility
Chiropractic care
Wellness programs

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