New Charitable Deduction for Non-Itemizers

Even if you don’t itemize your deductions, you can now deduct up to $1,000 as an individual or $2,000 as a married couple for charitable giving.

How does this benefit me financially?
This directly reduces your taxable income, which can lower the amount of taxes you owe. For example, a married couple in the 22% tax bracket who gives $2,000 could save about $440 in taxes, making the true cost of their gift only $1,560, while still providing the full $2,000 impact to organizations like the East Texas Food Bank.

Qualified Charitable Distributions from an IRA

If you’re age 70½ or older, you can give directly from your traditional IRA to charity.

How does this benefit me financially?
Your gift counts toward your Required Minimum Distribution (RMD) but is not counted as taxable income. This can:

• Lower your overall taxable income
• Reduce taxes on Social Security benefits
• Potentially lower Medicare premium costs

This is one of the most tax-efficient ways to give!

Donating Appreciated Stock, Land, or Other Assets

If you donate a capital asset which has been held for more than 12 months and has increased in value, you avoid paying capital gains tax on the appreciation.

How does this benefit me financially?
You receive two tax advantages:

• A charitable deduction for the full fair market value
• No capital gains tax on the increase in value

Example:
If you bought stock for $5,000 and it’s now worth $15,000. If you donate it to charity:

• You avoid paying capital gains tax on the $10,000 gain
• You may deduct the full $15,000 value
• This could save thousands in taxes, compared to selling the asset and donating cash

 

Have more questions? Please reach out to our partners at Henry & Peters, a CPA firm located here in East Texas.

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903.597.6311