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charitable contribution

Leaving Your IRA to Your Family First, Then to Charity

There is a way to leave your IRA eventually to a charity, but first provide some funds to your family, and save taxes to boot – the CRT.

Should I Itemize or Use The Standard Deduction?

Taxes (Photo credit: Tax Credits) As you prepare your tax return, you have a decision to make about your tax deductions – you can choose between itemizing and using the standard deduction.  But how do you choose? The Standard Deduction is just what it sounds like – a standardized deduction that you can choose to utilize by default, and you don’t have to do a lot of recordkeeping through the year in order to use the the standard deduction.  In order to itemize deductions, you need to save receipts from various deductible expenses through the year, and use those to prepare your itemized return. Oftentimes it is a foregone conclusion, once you understand the differences between itemizing and the standard deduction. Standard Deduction vs. Itemizing: Facts to Help You Choose Each year, millions of taxpayers choose whether to take the standard deduction or to itemize their deductions.  The following seven […]

Will TCJA Encourage QCD?

A byproduct of the Tax Cuts and Jobs Act may be a new appreciation for and much greater use of the QCD for charitable contributions from your IRA.

How to De-clutter Physically and Financially

Throughout our lives we acquire things. This can start at an early age when we were given things as gifts and of course, the childhood tendency to collect and save many of the items that we came across. As we mature into adults, the desire or habit to continue to hold onto things may still linger. This leads to garages, basements, closets, bedrooms, and even storage facilities full of stuff. It can also creep into our financial lives – as we acquire different savings accounts, retirement accounts, or purchase things that continue to be automatically deducted from our bank account (a monthly subscription to a gym, perhaps). Decluttering can have a profound effect on our behavior. It can help lower the stress of trying to keep track of so many things. It can also free up time to enjoy the things in life that are important to us. Finally, it […]

Traveling for Charitable Purposes

Sometimes charitable work involves travel – such as for the Red Cross, for example. Did you know that your travel expenses for charitable work can be a tax deduction? Recently the IRS sent out a Summertime Tax Tip (2015-12) that outlines some valuable information about this deduction. Tips on Travel While Giving Your Services to Charity Do you plan to donate your services to charity this summer? Will you travel as part of the service? If so, some travel expenses may help lower your taxes when you file your tax return next year. Here are several tax tips that you should know if you travel while giving your services to charity: Qualified Charities.  In order to deduct your costs, your volunteer work must be for a qualified charity. Most groups must apply to the IRS to become qualified. Churches and governments are qualified, and do not need to apply to […]

Year-End Charitable Giving Tips

The end of the year, especially around the holidays, is a time when many folks’ thoughts turn to charitable giving. Many opportunities present themselves, from the gentleman with the bell and the red kettle to our local food and coat drives. With this in mind, the IRS recently published their Special Edition Tax Tip 2014-13 which details six tips for charitable giving. The actual text of the Tip is listed below. In addition to those tips, I’ll offer one more: if you are interested in utilizing the Qualified Charitable Distribution option from your IRA – presently this option has not been extended for tax year 2014. It’s possible that it might be extended yet this year, so check back here – we’ll keep you posted.

Charitable Donations

This time of year many people find it in their hearts to give. They’ll give to friends, family, loved ones and charitable organizations that can help maximize the gift such as a church, charity, or foundation. Last week I had written about the law of reciprocity and giving, and this week I’d like to mention how you can make your giving work in favor when tax season rolls around. As of this writing there are about 11 days left in 2013. Some individuals will be looking to see how much they can give or how much more they can give in order to receive the biggest tax deduction they can for charitable giving. Of course, gifts to friends and family are not deductible, but there are times when gifts or donations are completely deductible and may be to the tax advantage of the person giving or donating the gift. According to […]

2014 Mileage Rates for Tax Deductions

Recently the IRS published the mileage rates for various classes of deductible miles driven for tax year 2014. This amount is used in place of managing, collecting and tabulating the exact costs involved in operating a vehicle throughout the year. In order to use the standard mileage rates, you just track the miles you drive for each purpose (see below) and then compute the deductible mileage on your tax return when you file it the following year.  Keep a log of the miles driven and the purpose of the trip to substantiate the deduction.  This can be as simple as a paper calendar with your log notes, or more elaborate (check around, I bet there are apps out there for your iphone or other gadgets to do this). You have a choice to either use the standard rate or the actual expense of operating your vehicle.  In either case, parking […]

Charitable Contribution Tips

As the tax year comes to a close, many folks are looking for ways to reduce their taxes by making charitable contributions.  During December’s various holidays many folks are inclined to make extra contributions as well, in the spirit of the season. The IRS recently published a Special Edition Tax Tip 2012-15, which offers tips for tax benefits of gifts that you might make.  The actual text of the Tip is reproduced below: IRS Offers Tax Tips for “The Season of Giving” December is traditionally a month for giving generously to charities, friends and family.  But it’s also a time that can have a major impact on the tax return you’ll file in the New Year.  Here are some “Season of Giving” tips from the IRS covering everything from charity donations to refund planning: Contribute to Qualified Charities. If you plan to take an itemized charitable deduction on your 2012 […]

What Charitable Contributions Are Deductible?

Walk for Cancer – it’s raining! (Photo credit: miamism) As you prepare your income tax return, you may find yourself asking the question – how do I determine if a charitable contribution is deductible?  In addition, you may have questions about just how to file for the various deductions – such as non-cash deductions, like contributions to Goodwill for example. The IRS recently published their Tax Tip 2012-57, which lists eight tips regarding charitable contributions that you may find useful.  The text of the Tax Tip is included here: Deducting Charitable Contributions: Eight Essentials Donations made to qualified organizations may help reduce the amount of tax you pay. The IRS has eight essential tips to help ensure your contributions pay off on your tax return. If your goal is a legitimate tax deduction, then you must be giving to a qualified organization.  Also, you cannot deduct contributions made to specific […]

Charitable Contributions From Your IRA – 2012 and Beyond

Image via Wikipedia January 1, 2013 update: Passage of the American Taxpayer Relief Act of 2012 has extended the QCD through the end of 2013.  See this article for more details. At the end of December, 2011, the provision for Qualified Charitable Distributions (QCD) expired.  That provision allowed the taxpayer age 70½ or older to make direct distributions from an IRA account to a qualified charity, bypassing recognition of the distribution as income.  For more information on the expired provision, see the original article about charitable distributions from your IRA. With the expiration of this provision, you can still make charitable contributions of money distributed from your IRA.  The difference is that these contributions are no different from a contribution that you’ve made from your savings account or regular income.  In order to achieve a tax advantage from the contribution, you will itemize the charitable contribution on your tax return.  […]

Year End Income Tax Planning

Image via Wikipedia Once you’ve reached the last month of the tax year, there aren’t a lot of things that can be done to minimize your income taxes.  But there are a few things that could be done. For example, you could double up your real estate taxes by prepaying next year’s tax during December.  Doing this with, for example, a $3,000 per year real estate tax bill could result in a reduction of tax for the year of $750 if you’re in the 25% bracket.  Keep in mind though, that you’ll have forked out this money long before it is actually due in most cases, and for the next year you won’t have this deduction available if you used it in this year. The same could be done with your charitable contributions – there’s no reason that you can’t make additional contributions to your favorite charities at the end […]

Charitable Contributions From Your IRA in 2010 and 2011

With the passage of the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 (Tax Act 2010 or 2010 Tax Act), Congress retroactively reinstated the ability to make direct qualified charitable distributions (QCDs) from your IRA, in amounts up to $100,000 by IRA owners who are at least age 70½ years of age. This provision expired at the end of 2009, but is once again available, retroactive to January 1, 2010, through December 31, 2011. The provision allows the individual, age 70½ and thus subject to Required Minimum Distributions (RMDs), to make contributions directly from an IRA to a Qualified Charity, in an amount of up to $100,000 per year.  Since the 2010 Tax Act was passed so late in the year, there is a special provision for 2010 only, which allows the IRA owner to make such a QCD for the 2010 tax year as late as […]