Not Your Mama’s Bake Sale …
By Guest Blogger Kathy Weber
Why do we give? The primary reason is NOT for a tax write-off.
But, do you know how much you can save in Federal income taxes when you make a charitable contribution? The amount you can save in taxes is a percentage of your charitable contribution, as long as you meet certain rules. This year, if you contribute $1,000, you can save up to $350 in Federal income taxes. If you contribute $10,000, you can save up to $3,500. If you contribute $100,000, you can save up to $35,000. Do you see the trend?
What are the rules?
1. You must actually make the gift. You must contribute to a qualified, tax-exempt organization.
2. You must be able to itemize you deductions. (Get personalized tax advice from your CPA.)
What if you want the tax write-off now, but want to distribute funds to one or more charitable organizations over several years?
Here is an example of a donor-advised fund—
My client wanted to make a sizeable charitable contribution to several health care non-profit organizations, but not all in the same year. Her income was high in the last year of her career before retirement due to exercising stock options. Her tax bracket was 35 percent this one year, and the year before and after it was expected to be 25 percent. She made a sizeable contribution to a donor-advised fund we helped her establish, getting the write off in her high-income year, and distributing the funds over 8–10 years. She was tax savvy and generous!
Do you know your tax bracket? Every woman should know her “taxable income” from IRS Form 1040. Can you find it? Your taxable income determines your “tax bracket,” and this is useful information to know.
Interested? We can talk more! Join me on April 24 at 8:30 p.m. EDT for an exciting and informative webinar: Not Your Mama’s Bake Sale: Your Giving Can Change the World.