I’ve explored the donor advised fund, my favorite vehicle for giving, but there are other options that Dr. Jim Dahle explains in the post below.
This post was originally published on The White Coat Investor.
Did you know that 41% of charitable giving occurs in December? I like to think people are motivated by the season, but the fact that the tax year is coming to end probably has something to do with it as well, as evidenced by the fact that 10% of giving occurs on December 30th or 31st!
Whatever your motivation, I applaud you for supporting charitable causes. I have given a significant percentage of my income toward charitable causes for years, and I think the act of giving not only helps others, but helps me to be a better person. If you don’t currently have a habit of giving to charities you support, I suggest you develop one, no matter what your income, debt, or net worth. Following are a few ideas for maximizing tax benefits for charitable purposes:
Tax Benefits for Charitable Donations
1. You can deduct your charitable contribution on Schedule A.
For most physicians, your donation will be completely tax-deductible. That means that for a physician with a 38% marginal tax rate (33% federal plus 5% state), a donation of $10,000 to a qualified charity will save her $3800 in income taxes. It is possible that these savings could be even higher if you are currently in a phase-out range. [And yes, I’m ignoring the relatively minor Pease limitations.] Obviously this isn’t a method of making money (since you’re giving away more