All articles tagged with #charitable donations
Delaying charitable donations until 2026 can provide significant tax benefits, allowing single filers to save up to $1,000 and married couples up to $2,000 on their taxes, due to a new provision in the tax law that applies to those who take the standard deduction.
As the deadline for 2024 required minimum distributions (RMDs) approaches, individuals aged 73 and older must avoid common mistakes to prevent penalties. Key errors include not taking the full RMD, failing to withdraw from each 401(k) separately, mistakenly taking Roth RMDs, and not utilizing qualified charitable distributions (QCDs) to reduce taxable income. Consulting a tax professional can help navigate these complexities and ensure compliance before the year-end deadline.
Financial advisors suggest that donating appreciated stock to charity can be a more tax-effective strategy than cash donations, as it avoids capital gains taxes and allows for a deduction of the stock's market value. With the higher standard deduction, fewer taxpayers itemize, but strategies like "stacking deductions" or using donor-advised funds can help maximize tax benefits from charitable giving.
Warren Buffett, at 94, announced new charitable donations by converting 1,600 Berkshire Hathaway Class A shares into 2.4 million Class B shares. He donated 1.5 million shares to The Susan Thompson Buffett Foundation and 300,000 shares each to The Sherwood Foundation, The Howard G. Buffett Foundation, and NoVo Foundation. Buffett emphasized his belief in supporting children without creating a family dynasty and has designated successor trustees for his philanthropic efforts. He advises parents to discuss their wills with mature children to ensure understanding of their decisions.
President Joe Biden and his wife reported a 7% increase in income to $619,976 for 2023, paying 23.7% in federal taxes, with most of their earnings coming from their jobs and additional income from investments and book royalties. Biden plans to deliver a speech on tax policy, advocating for higher rates for the wealthy. The couple donated $20,477 to charity, while Vice President Kamala Harris and her husband reported $450,380 in income, $88,570 in federal taxes, and $23,026 in charitable donations for 2023.
Elon Musk criticized MacKenzie Scott for her charitable donations to organizations focusing on diversity, equity, and inclusion, and made disparaging remarks about wealthy ex-wives. Scott, who has donated over $16 billion since 2019, typically refrains from commenting on her donations and has opened an application process to distribute more funding.
With just a month left in the year, experts suggest several tax strategies to reduce your tax bill or boost your refund. These include maximizing pretax 401(k) contributions, "bunching" donations to exceed the standard deduction, making the most of your tax bracket by considering income projections, and weighing strategies that can be implemented in the new year. Additionally, making pretax IRA contributions and contributing to a health savings account can offer further tax benefits.
The Internal Revenue Service (IRS) is warning people about fake charities and offering tips to avoid scams when making charitable donations. To determine if a charity is legitimate, use the IRS' Tax Exempt Organization Search tool and check watchdog sites like Charity Navigator and CharityWatch. Avoid charities that pressure for immediate payment or request gift cards or wire transfers. When donating on crowdfunding sites, stick to campaigns organized by people you know and ensure clear goals and spending details are provided.
Retirees can reduce their 2023 taxes while donating to charity through a strategy called qualified charitable distributions (QCDs). This allows individuals aged 70½ or older to transfer money from their individual retirement account (IRA) directly to a nonprofit organization, up to $100,000, without it being counted as taxable income. QCDs provide a tax break by not counting the withdrawal towards adjusted gross income, which can help retirees claim a tax break for charitable gifts even when taking the standard deduction. QCDs can also cover required minimum distributions and help prevent other tax issues such as higher tax brackets, increased Medicare premiums, or higher taxes on Social Security benefits. However, QCDs can be more cumbersome for tax reporting and administration, requiring careful record-keeping and planning in advance.
As the year-end approaches, there are several tax-saving strategies to consider. The Inflation Reduction Act offers tax credits for energy-efficient home improvements and electric vehicle purchases. Other strategies include maximizing contributions to 401(k) accounts, making charitable donations, and utilizing tax-loss harvesting. Seniors should be aware of the required minimum distribution (RMD) rules for retirement accounts. It's important to take advantage of these opportunities before December 31 to maximize tax savings.
The fate of Matthew Perry's residuals from the popular sitcom Friends, which brought in an estimated $20 million annually, remains uncertain following his passing. California law provides three potential scenarios for the inheritance of his residuals: Perry may have designated beneficiaries, such as his parents or half-siblings, or a trust that would determine the recipients. Alternatively, if no beneficiaries were designated, state law would decide the distribution of his assets. Perry's charitable endeavors, particularly in the field of addiction, may also play a role in the allocation of his estate.
A couple in their 70s with $760,000 in savings and $10,000 monthly income from Social Security and pensions are considering donating their required minimum distributions (RMDs) from their IRAs to charity to avoid higher income tax. The decision depends on their financial comfort and future expenses. They should assess their future needs and ensure they won't require the funds they plan to donate. They must also confirm that the charity is qualified according to the IRS. Qualified charitable donations allow individuals to give away their RMDs from IRAs without paying taxes on the money. They can donate up to $100,000 under the QCD rules and deduct the donation from their taxable income.
Ticket prices for the Red Sox-Yankees matchup have hit a low point, with resellers offering seats for as little as $5. The lack of demand can be attributed to both teams being out of the playoff mix, midweek games in September losing their appeal, and poor weather forecasts. Ace Ticket owner Jim Holtzman is donating hundreds of tickets to charitable organizations rather than selling them at such low prices. These prices may be the lowest in 20 years for a Red Sox-Yankees game.
Preethi, a transgender woman in Bengaluru, India, went from begging on the streets to owning her own electric rickshaw, thanks to a charitable donation. The organization, Shishu Mandir, aims to reduce pollution while empowering women and transgender individuals by providing them with electric vehicles for ride-hailing services. This initiative is part of India's efforts to transition to clean energy in a way that benefits people across economic backgrounds. By offering training, licenses, and affordable transport, electric vehicle companies and government programs can uplift those with lower incomes and ensure a just transition. Preethi's success story highlights the positive impact of such initiatives, as she now earns a steady income, can afford her own home, and enjoys the respect she receives in society.
Jefferies Financial Group has pledged to donate $1 million to support the recovery efforts for the devastating wildfires in Hawaii. The financial services firm will carefully allocate the funds to qualified charities to ensure they reach those most in need. In addition to the direct donation, Jefferies will also contribute "100% of net global trading commissions" from its Global Trading Day towards charitable donations. The wildfires have claimed the lives of at least 96 people and caused significant destruction in Lahaina.