Your generosity can pay off in more ways than one: when you give a charitable gift, the IRS will forgive a tax. In episode 48 of the YMYW podcast, Joe Anderson, CFP® and Big Al Clopine, CPA share how to make tax-smart charitable donations. Original publish date July 16, 2016 (hour 2). Note that content may be outdated as rules and regulations have changed.
00:00 – Intro
02:47 – “Here’s what does create a tax deduction for volunteering: your mileage to and from some type of charitable event you go to…supplies you purchase directly for charity, and there are some fundraising expenses that will qualify for tax deductions. A lot of people miss those deductions. Those deductions reduce your taxable income which ultimately reduces the amount of taxes you pay.”
04:36 – “If you’re spending money for charitable purposes or for a specific charity, then those expenses may be tax-deductible.”
07:00 – “Give appreciated stock directly to charity because the tax deduction you get is the current value of the stock on the day you donated, and you don’t have to pay tax on the gain.”
12:04 – “If you can get a little more sophisticated in your tax planning and combine a couple of these different strategies together, you can save money in tax and actually create more income.”
14:00 – “It’s called a donor-advised fund. You can actually set up a fund at a brokerage firm, it’s a special account where you control the investments and then you decide which charities get what amounts…here’s the key: the key is that the year you set up the account and put the money in the account – that’s the year you get the tax deduction.”
20:02 – “You can take money out of your IRA and give it directly to charity.”
25:42 – “There’s no harm in getting a tax benefit. The IRS encourages it; you just have to know what’s available and what to do.”
29:44 – “Once you get a better picture on how all of this looks, you’ll make better decisions.”
35:07 – “You have more control over taxes now than any other time in your life.”
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IMPORTANT DISCLOSURES:
Pure Financial Advisors is a registered investment advisor. This show does not intend to provide personalized investment advice through this broadcast and does not represent that the securities or services discussed are suitable for any investor. Investors are advised not to rely on any information contained in the broadcast in the process of making a full and informed investment decision.
• Investment Advisory and Financial Planning Services are offered through Pure Financial Advisors, LLC, a Registered Investment Advisor.
• Pure Financial Advisors LLC does not offer tax or legal advice. Consult with your tax advisor or attorney regarding specific situations.
• Opinions expressed are not intended as investment advice or to predict future performance.
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• All information is believed to be from reliable sources; however, we make no representation as to its completeness or accuracy. As rules and regulations change, content may become outdated.
• Intended for educational purposes only and are not intended as individualized advice or a guarantee that you will achieve a desired result. Before implementing any strategies discussed you should consult your tax and financial advisors.
CFP® – The CERTIFIED FINANCIAL PLANNER™ certification is by the Certified Financial Planner Board of Standards, Inc. To attain the right to use the CFP® designation, an individual must satisfactorily fulfill education, experience and ethics requirements as well as pass a comprehensive exam. Thirty hours of continuing education is required every two years to maintain the designation.
AIF® – Accredited Investment Fiduciary designation is administered by the Center for Fiduciary Studies fi360. To receive the AIF Designation, an individual must meet prerequisite criteria, complete a training program, and pass a comprehensive examination. Six hours of continuing education is required annually to maintain the designation.
CPA – Certified Public Accountant is a license set by the American Institute of Certified Public Accountants and administered by the National Association of State Boards of Accountancy. Eligibility to sit for the Uniform CPA Exam is determined by individual State Boards of Accountancy. Typically, the requirement is a U.S. bachelor’s degree which includes a minimum number of qualifying credit hours in accounting and business administration with an additional one-year study. All CPA candidates must pass the Uniform CPA Examination to qualify for a CPA certificate and license (i.e., permit to practice) to practice public accounting. CPAs are required to take continuing education courses to renew their license, and most states require CPAs to complete an ethics course during every renewal period.
