This week, I’m talking about year-end tax planning to help you take advantage of opportunities to potentially lower your taxes this year.

Today, I’m talking about taking advantage of charitable deductions. If you itemize and don’t just take the standard deduction when you file your taxes, your charitable giving can have a meaningful impact on your taxes.

In today’s tip, I want to touch on 3 important strategies to consider for taking advantage of charitable giving:

  • Strategy 1 that’s unique for this year - normally, you won’t benefit on your taxes for your charitable donations if you don’t itemize, but this year, the CARES Act created an above-the-line deduction of up to $300 for cash contributions from taxpayers who don’t itemize. So even if you take the standard deduction, you can still benefit from your charitable contributions because of the CARES Act for 2020
  • Next is charitable bunching. This is a strategy where you lump your charitable donations into one year, so instead of donating to charity every year, you would donate more dollars less often. So for example, if you donate $5,000 every year to charity, but switch to donating $15,000 every 3 years instead, you would still donate the same amount, but by donating a higher amount in a given year, the strategy of lumping or bunching those contributions into one year can help you qualify for itemized deductions and hence, allow you to continue to receive a tax deduction on those charitable contributions in the years that you bunch.
  • Lastly, consider donating property, appreciated stock or other real assets. You can still often get a tax deduction when you donate certain items in-kind, and it’s a great strategy if you are strapped for cash but you have a valuable asset that you would like to donate.

That’s it for today. Thanks for listening. My name is Ashley Micciche and this is the One Minute Retirement Tip.

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