Get your cake and eat it too! When you add charitable giving to your financial planning, doing good for others means a little extra dessert for you in the form of tax benefits. Upon giving to charities, you may be able to secure additional tax deductions that end up saving money for your heirs. Certain giving strategies may help you lower your tax liability in tandem with helping a person, cause, or organization you care about.
Still alive? Here’s how you can give…
When it comes to legacy gifts and taxes, you can expect to use certain deductions that will help you lower your taxable income in the year you give, but you can also set things in motion to help to reduce your overall estate liability down the road when you kick the bucket. Your taxable income each year will drive the narrative for this type of planning, but a properly designed giving plan will allow you to enjoy the several benefits of giving for years to come.
Two deductions are Better Than One
There are countless reasons to be philanthropic, but there are going to be certain times in your life when giving more is going to have an even greater impact on your planning.
In the years you end up earning more income than average (sale of property, bonus, inheritance, etc), consider lumping together several years of smaller planned donations into one big donation. This will give you a higher amount to deduct in those high-earning years to keep your taxable income in a lower marginal bracket
