If you’re charitably inclined but just short of surpassing the standard deduction, consider making two years’ worth of donations in 2018 to get over the hurdle so that you can itemize.
This is known as “bunching” or acclerated charitable deductions.
“My suggestion is to do zero or close to zero giving in one year and take the standard deduction,” said Jeff Fosselman, CPA and senior wealth advisor at Relative Value Partners in Northbrook, Illinois.
“The following year, load all of your charitable giving for two years into one,” he said.
If you’re over 70½ and taking required minimum distributions from a traditional IRA, consider transferring that money directly to a qualifying charity.
This move, known as the qualified charitable distribution, allows you to meet your RMDs and your charitable goals at the same time — and you won’t incur income taxes on the distribution.
“If you don’t get a tax deduction for the gift, you may as well do the qualified charitable distribution and not have to report it as income,” said Tom Steffen, director of advanced planning for Baird’s private wealth management group.
Article by MUM staff Member Brad Onasch, Co-Director, Invincible America Department
- Ramp up your Tax Savings on 2018 with this strategy
- How to make the most of your charitable donations
Development Office ♦ Maharishi International University ♦ 1000 North 4th Street ♦ Fairfield, IA 52557
firstname.lastname@example.org ♦ 641-472-1180 Monday-Friday, 10:15-4:30 CST
Maharishi International University, a nonprofit, tax-exempt 501(c)(3) corporation since 1988, is designated to receive charitable gifts.