‘Tis the season of giving and, as the end of the year approaches, it is also the time to make year-end tax saving moves. Regardless of the tax benefits, giving back to your community, especially after the difficult year we’ve had, can truly change people’s lives. Luckily, supporting causes and communities in need leaves a lasting impact but also helps to lower your taxable income, allowing you to both support a cause you believe in and reduce the amount you owe in taxes.
If you itemize your deductions when filing taxes, last-minute charitable donations could help decrease your tax bill as contributions are deductible for the year in which it was paid. Here are 5 tips for how to reduce your taxable income while supporting causes that are meaningful to you.
Deductions For Business Owners
While itemizing your 2022 tax deductions, don’t forget that any “ordinary and necessary” business expenses are also tax-deductible. This can include the home-office deduction, reimbursement or write-offs for mileage, and any equipment or necessary items purchased for your job or office, so keep those receipts and track your expenses to save even more on taxes! For more information check out our blog, “5 Tips for Charitable Giving to Reduce Your Taxable Income”.
Need Help Planning Your Charitable Contributions?
If you have any questions about the tips mentioned here or need help planning how to make charitable contributions, don’t hesitate to contact us before the end of the year. Schedule a complimentary consultation today.
*Generally, a donor-advised fund is a separately identified fund or account that is maintained and operated by a section 501(c)(3) organization, which is called a sponsoring organization. Each account is composed of contributions made by individual donors. Once the donor makes the contribution, the organization has legal control over it. However, the donor, or the donor's representative, retains advisory privileges with respect to the distribution of funds and the investment of assets in the account. Donors take a tax deduction for all contributions at the time they are made, even though the money may not be dispersed to a charity until much later.