Charitable Giving and Other End of Year Reminders
Maximize Your Tax Deductions by Bunching Your Charitable Donations
If you want to make the most of charitable giving, consider a bunching strategy, which allows you to “stack” your gift-giving in a tax year.
For example, if you’re single and would like to donate $10K annually to your favorite 501(c)(3), you would need to exceed the standard deduction of $12,950 to claim any itemized donation. While the tax break isn’t your primary reason for giving, you might as well take advantage of the incentives Uncle Sam offers!
Instead, you could give $10K on Jan 1st and the following year’s $10K donation on Dec 31st. This strategy would allow you to claim the $20K gift as an itemized deduction in a single year since it exceeds the standard deduction – which reduces your tax liability!
As a firm, TrustWealth Strategies is endorsing Firefighter’s On A Mission’s efforts to help fight homelessness in Indianapolis.
Firefighters from across Indiana will be participating in the Drumstick Dash on Thanksgiving morning in over 60 lbs of gear to raise money for Wheeler Mission.
You can support the cause in two ways:
Make a tax-deductible donation at firefightersonamission.org
Schedule a Fire Dawgs Junk Removal “Curbsides For Charity” pickup on November 20th, 2022 by calling (317)291-3294
Here are a couple other planning points with a December 31st deadline:
Roth Conversions – A strategy where you elect to pay the tax on funds in a pre-tax account to convert them to your Roth IRA, where they’ll never be taxed again
Tax gain/loss harvesting – The recent volatility in the stock market may have created an opportunity to lock-in large gains in a taxable account and offset them with this year’s losses to net a $0 tax bill
529 College Savings Fund – Contribute up to $5K to receive a 20% ($1K!) tax credit from the state of Indiana
Required Minimum Distributions (RMDs) – If you or someone you know is over the age of 72, ensure RMDs have been taken to avoid the IRS’ 50% excise tax