Three Ways to Help Others, While Helping Yourself (to lower your taxes)

Nothing feels as good as giving to someone else. Correction: There’s actually something better! It’s when you give to someone else, and get a tax break at the same time. It might sound too good to be true, but it’s true—even if you don’t itemize on your return.

Ready? Here are three ways to help others, while helping yourself:

1. Gift an appreciated stock. Instead of giving cash, give the gift of an Why? When you give cash, most of the time you’ll only be able to deduct it on your tax return if you itemize—which doesn’t happen a lot anymore. By contrast, when you gift an asset that has appreciated since you bought it, you benefit because you don’t have to pay capital-gains tax on the appreciated stock when you sell it. Everyone wins (except for the IRS, LOL!).

2. State tax credits. If you have income and file a state tax return in Arizona, you can likely take advantage of Arizona’s state tax credits. In other words, you get to determine where your charitably-earmarked tax dollars actually go! There’s a whole bunch of worthy places and causes that could benefit from your generosity. Need help deciding? We’ve posted a nice list right here on our site.

3. Qualified Charitable Distributions (“QCD”) from your IRA. When you are required to take distributions from your IRA, you can opt to have that distribution paid directly to a charity instead of yourself. It gets better: If you make a QCD directly from your IRA, you don’t have to pay taxes on that portion of your distributions since it went straight to the charity. QCDs may also have the indirect benefit of helping with other tax credits and deductions.

Unsure if you can take advantage of any of these? Give us a call! We’ll be happy to help.