According to press reports, it now appears that comprehensive tax reform legislation may be enacted next year. As a result, those who enjoy tax savings from itemizing their charitable gifts and other deductions may want to check with their advisors to determine whether they might enjoy greater benefits from their deductions this year than in the future.
Some taxpayers could benefit by accelerating deductions into this year and deferring income into next year, especially if they anticipate lower income tax rates next year.
Additional charitable contributions completed this year can increase your tax refund or lower your income tax bill for current year. Checks mailed and gifts completed via credit cards by December 31 may be itemized for tax purposes.
Gifts of publicly traded securities and mutual funds must also be completed by December 31.
In addition, those aged 70 ½ or older may benefit by making gifts directly from an Individual Retirement Account (IRA) in amounts totaling up to $100,000.
Contact your IRA administrator for guidance on how to make a gift in this manner. Such a transfer can be especially effective for those who do not expect to itemize their deductions or those who would prefer to minimize or eliminate taxes resulting from a required minimum distribution.