Podcast: Making the Most of Charitable Contributions

Discover the Latest Donation Updates and Techniques to Save Money This Tax Season

Key Points:

• Charitable lead trusts gain popularity with tax-free benefits.
• Taxpayers can now donate 100% of their adjusted gross income.
• Single-filing taxpayers not itemizing can deduct $300 of donations.

With tax season just around the corner, host Tyler Kern discussed the latest updates around charitable contributions with Justin Reeves, CPA, Tax Partner at Weaver.

For those who itemize their deductions, the limit of cash contributions in 2021 has increased from 60% to now a staggering 100% of adjusted gross income.

Reeves clarified the difference in cash and non-cash contributions, “The numbers are still the same for non-cash donations and cash donations to private foundations — those remain at the existing limits — but it’s a real great opportunity for taxpayers to give up to 100%… it’s almost unheard of.”

Reeves also commented on how taxpayers not itemizing can still receive the same benefit as last year — single-filers are able to give up to $300 (married and filing jointly can give up to $600) to deduct against their income.

To really kick it up a notch, Reeves explained some additional techniques to utilize:

• Taxpayers can donate their appreciated property to a charity and deduct the fair market value to avoid capital gains tax.
• As one of the most popular techniques, taxpayers can donate cash or property to a donor-advised fund. This allows the donor to receive a donation deduction in one year, but he/she pays that amount to the charity over a period of time.
• For a more advanced technique gaining popularity, charitable lead trusts enable taxpayers to receive a charitable deduction while maintaining the ability to transfer tax-free assets to their heirs.

As his final words of advice, Reeves encourages contacting a CPA at Weaver before making your gift to ensure you receive the best benefit and fulfill any special requirements. Find more financial education information at weaver.com.

Listen to the full episode to hear all of Reeves’ insights on charitable giving strategies.

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