Reduce Your Taxes and AGI by Giving to Charity
Strategies to reduce your adjusted gross income (AGI) through charitable giving can lead to potential tax savings by lowering one’s tax bracket. AGI is calculated by subtracting deductions from taxable income.
Three effective methods for charitable giving include:
- Donating cash and property.
- Contributing appreciated securities.
- Gifting part of required minimum distributions from retirement accounts directly to charity.
Each method provides unique benefits, such as tax deductions and the avoidance of capital gains tax. To maximize these advantages, taxpayers must itemize their deductions. It is recommended to seek personalized guidance from a financial advisor or tax professional.
Shawna Theriault, CFP®, CPA, CDFA®
Senior Financial Advisor, Wiser Wealth Management
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