Supporting our favorite charities and worthy causes is important to all of us. However, many people don't know that by itemizing they can also benefit. If the total of your itemized deductions exceeds the standard deduction, you can maximize the benefit to both your charity of choice and yourself by listing your itemized donations on Schedule A. The standard deduction for single filers for 2024 is $14,600; for those married filing jointly, it is $29,200.
One way to help push yourself above this threshold is to group charitable deductions. You can do this by using a donor-advised fund. For example, instead of donating to a qualified charitable organization this year and next, consider combining the donations in the current year. This may push your total itemized deductions over the standard deduction.
Another option you can utilize is to donate appreciated investments from your taxable account to charity. In this case, you would avoid capital gains on your appreciated stock and get a charitable contribution deduction equal to the appreciated value.
Also, remember that the deduction for cash contributions to public charities has been increased to 60 percent of AGI for 2018-2025. To make sure the IRS recognizes the charity as a qualified charitable organization, you can check here: https://apps.irs.gov/app/eos/
These decisions should always be made in the context of your financial plan and personal goals. As a tax-focused financial planning firm, we strategically plan for the tax implications and walk you through our financial planning process. Be sure to check with your tax advisor or contact us at www.CadencePlanningChicago.com or www.CadencePlanningLLC.com to learn more.
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