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29 November 2016

End-of-Year Giving Guide

End-of-Year Giving Guide

‘Tis the season to catch up on your last-minute tax deductions and strategies. What better way to save on taxes than to give that hard-earned money to the people and organizations you choose instead? There are two ways to do it: gifts to loved ones and charitable giving.

Giving Money to Loved Ones

Individuals can give up to $14,000  free from gift taxes to other individuals each year. For married couples, the exclusion amount is $28,000, but the gift must qualify as a “present interest.” While giving money to others in general will not directly lower your taxes, giving money to loved ones over time is a good way to avoid future taxes such as a gift tax on one large, lump-sum gift or on estate taxes after you’re gone.

When considering giving money to other individuals, keep in mind:

Charitable Giving

Giving money to charities is a great way to offset taxes each year. According to the IRS, if your goal is a legitimate tax deduction, then you must be giving to a qualified organization. In other words, be sure the organization is a 501(c)(3) in good standing.

Other points from the IRS to keep in mind:

  • You cannot deduct contributions made to specific individuals or political organizations and candidates.
  • If you receive a benefit because of your contribution such as merchandise, tickets to a ball game or other goods and services, then you can deduct only the amount that exceeds the fair market value of the benefit received.
  • To claim a deduction for contributions of cash or property equaling $250 or more, you must have a bank record, payroll deduction records or a written acknowledgment from the qualified organization.

  • If you’re past retirement age, donating from your IRA is an even more valuable option. Late last year, Congress made permanent a major tax break for individuals giving money from an IRA to charity. Now, if you’re 70 ½ or older, you can donate up to $100,000 to charity each year, tax free.

Top Charities in San Antonio

Finding a reputable charity can be a challenge. Organizations like Charity Navigator can help by providing an evaluation of the charity you’re considering, including a score on the organization’s financial health, accountability and transparency. According to the organization, the following are the top-rated charities in San Antonio right now (click on the name of each organization to find out more about them):

For questions on the tax advantages of giving and other last-minute tax-saving strategies, contact us.

Image Copyright: vltrdias / 123RF Stock Photo

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