Have You Done Everything Possible to Decrease Your Tax Liability for 2009?
December 3, 2009 — A preliminary look at your tax obligations this year may have you scrambling for additional deductions. If you haven’t already considered them, charitable gifts are a great way to achieve two very important goals - reducing the taxes you owe the government and positively impacting on the world around you. Investing in your favorite charitable organization is a great way to not only make a difference in the lives of those who benefit from your gift, but also to lower your taxes. Consider the following three steps that will ensure tax savings this year.
- First Things First
List the causes you would like to support. Then, if you haven’t already done so, get an idea of tax liability by calculating your income. For example, you may have sold assets this calendar year or, for other reasons, have a larger-than-normal tax bill. In this case, move some of your anticipated giving for next year to this year to create a larger deduction this year.
- Get a Charitable Income Tax Deduction
Cash, real estate, personal property, and stocks are among the most popular charitable gifts. Depending on the gift type you choose, you are generally eligible for a charitable income tax deduction that can be as high as 30 to 50 percent of your adjusted gross income.
- Watch the Calendar
All gifts must be completed by December 31 to qualify for an income tax deduction this year. Cash contributions sent by mail are deductible if they are mailed by midnight on December 31, and credit card donations made by December 31 are valid as 2009 deductions. Note that gifts of securities are generally deductible on the date they are transferred to the recipient organization’s books - not the date you ask your broker to make the transfer.
According to Congressional staff, the House of Representatives will vote as early as next week to extend the IRA Charitable Rollover for one year, through the end of 2010. Unless Congress acts soon, the rollover, which allows individuals age 70½ and older to make outright charitable donations of up to $100,000 from IRAs and Roth IRAs without having to count the distributions as taxable income, will expire on December 31.
You are encouraged to contact a tax advisor to discuss your best giving options and strategies. You may also contact Eric Von in EAA’s Donor Relations Department at 920-426-6887 (800-236-1025) or firstname.lastname@example.org at any time.