As the holiday season approaches, its easy to get wrapped up in shopping and festivities, but as the year comes to a close, our minds might turn to more practical matters–like taxes.
If you itemize your deductions, you already know that a gift to a favorite charity can help reduce your taxable income and therefore reduce how much tax you might ultimately pay. In addition to the benefit of just knowing you’ve helped feed the hungry in Muncie, there are particular ways and reasons donations to the Soup Kitchen of Muncie this year can give right back to you.
If you’ve reached 70½ consider making your annual required minimum distribution (RMD) from your IRA directly to a charity. A “qualified charitable distribution” helps you meet your RMD without it being included in your taxable income. Therefore, the donation is changed from an itemized deduction to a direct reduction in your adjusted gross income. There is an annual limit of $100,000 for this donation.
If you are younger than 70½, that doesn’t mean a donation this year won’t work to your advantage. Consider how potential changes in the proposed tax plan could affect future deductions for charitable giving. If the plan passes, standard deductions may double under the proposed plan, making itemized deductions out of reach for many taxpayers. Take advantage of the opportunity to deduct your charitable gifts now by making a generous gift to the Soup Kitchen before midnight on December 31st.
Whatever your reasons for giving, know that donations to the Soup Kitchen of Muncie have a direct impact on those we serve every day.
Bringing a warm meal and a smile to a hungry person is the best gift you can give this year! Make your gift now at soupkitchenofmuncie.org/donate
* This material is for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any transaction.