- Tax Doctor
It’s Not Too Late to Cut Your Current Tax Bill in Half!
If you give to charities or have plans to in the future, it's not too late to cut your current tax bill in half!
Many people have the intention of doing a better job of “tax planning” in order to start having more favorable outcomes, but busy lives and life interruptions can leave them little time. If this is you, you’re not alone. Time flies even in normal times, but with the current stressful environment, everyone is scrambling even more, so you look at the calendar and think, “I can go see my accountant or financial advisor, or I can get my shopping done”, and the next thing you know the end of the year is upon us.
Most advanced tax planning requires communication about concepts, takes reams of paperwork and time to submit to custodians, so it would be easy to think “well, it’s too late.” But it’s not too late if charitable giving is part of your plans now or in the near future.
Donor-Advised Funds or “DAFs” can normally be established with a one-page simple account form, requiring minimal information and with hardly any real decisions to be made. You and your spouse are the donors, your children or siblings the contingents, and you don’t even have to choose a charity to get started. You put the money in the fund and you are eligible for 100% of the tax deduction now, even if you don’t make any charitable gifts from it this year or next. A DAF allows you to lump together tax deductions in a year where you need those deductions, without the extra work of choosing the charities, cutting those checks, etc., which can all be done later.
Example: You normally give away $5,000 a year to various charities. This year you got a surprise income from an inheritance, bonus, stock option, etc. You can put $50,000 in a DAF to neutralize the additional taxable income, but still only give $5,000 a year away from the DAF for the next ten years. You’re not giving more away than planned, just getting the deduction when you need it. Setting up a DAF is simple, easy, and almost completely time and decision free.
Call Ohio Tax Advocates at 614-356-8647 to set up a DAF and easily get that done before the end of the year.