Charity is an excellent way to give back to communities and with the assistance of professional tax advisors, individuals and organizations will be able to develop tax strategies that can help them provide the maximum amount to charity while receiving maximum tax advantages for themselves. Diamond Head Tax Group experts will help you understand tax strategies so you can decide how much to give, what asset to give and when to give in order to optimize your charitable contributions.
Charitable Contributions Can Help You Gain Tax Advantages
The US tax code provides a variety of tax incentives to support those who wish to do good through charity. Donations to charity can be deduced from income taxes. With the help of expert tax advisors and their deep knowledge of the tax code, individuals and organizations can devise tax planning strategies that can allow them to give even more while also benefiting from tax incentives.
Long-Term Appreciated Assets: Bonds, stocks or real-estate can be donated and you won't have to pay capital gains. You can take an income tax deduction for the full fair-market value, up to 30% of your adjusted gross income.
Combine Multi-Year Deductions Into One Year: You can benefit from "bunching" multiple years worth of charitable giving in one year to surpass the itemization threshold.
Income Tax Strategies: Donations to 501(c)(3) public charities count as an itemized deduction from income. As the tax rate is applied to a reduced income, this can minimize overall tax liability.
Capital Gains Tax Strategies: Charitable contributions can reduce capital gains tax liability if the donations are long-term appreciated assets. Capital tax gains can be minimized up to 20%.
Estate Tax Strategies: The federal estate tax applies to the transfer of one's property after their death. As of 2022 the estate and gift tax exemption is $12.06M per individual so fewer estates will be subjected to this tax.
Charitable tax strategies for estate planning can be complicated, so consulting professionals is advised.
Contact us and let our skilled Oahu Tax Experts offer their well-rounded tax advice and tailored tax solutions to help you file accurate tax reports and avoid unwanted IRS attention.
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