Review Your Itemized Deductions
By Saghir A. Aslam
Rawalpindi, Pakistan
(The following information is provided solely to educate the Muslim community about investing and financial planning. It is hoped that the Ummah will benefit from this effort through greater financial empowerment, enabling the community to live in security and dignity and fulfill their religious and moral obligations towards charitable activities).
Review your itemized deductions. If they are less than the standard deduction, your charitable contributions won't reduce your tax bill. Evaluate “bunching” several years’ worth of charitable contributions into the current year. This may increase your itemized deductions above the standard deduction threshold so you can receive a tax benefit for those gifts. Consider utilizing a donor advised fund for “bunching” your charitable gifts.
If you are 70 1/2 or older, consider the potential benefits of a qualified charitable distribution (QCD). A QCD allows you to make a text-free gift of up to $100,000 per year directly from your I R A to qualifying Charities. If you have to take a required minimum distributions (RMD) this year, a QCD count toward satisfying it without the Federal Tax consequences of being including in your adjusted gross income (AGI).
Before taking any action, consult with a tax advisor to help determine the best possible outcome.
The changes that have taken place in Washington DC may affect tax legislation, making it especially important to communicate throughout the year with your tax and legal advisor as well as your financial advisor to be prepared to take advantage of whatever opportunities may arise.
Qualified charitable distribution gives you extra benefit. If you meet the age requirement you may donate from your individual retirement account up to $100,000 each year to a charity that is approved. Double benefits benefit number one you get a deduction credit for the amount that you donate, in addition to that it will cover your alternative minimum withdrawal which means that you will not have to pay taxes for the money that you had to draw otherwise to meet the government requirements. So, you’re getting two benefits. Do take advantage of it provided you meet all the requirements.
What is your information
I have used this tool for myself to donate, the key point is when you want to donate you must always consult your attorney, your investment advisor, and your accountant. I don’t do anything; I don’t make any decisions without consulting them as I have mentioned above. As we all know the laws change regularly, accountants’ attorneys and tax advisers always keep themselves up to date as that’s their responsibility and that’s the requirement by law. Most important point anytime you want to make any decision you must completely do the research, you must do your homework, and don’t make any decisions until you have completely satisfied yourself and you are fully satisfied that this will help you in all matters.
(Saghir A. Aslam only explains strategies and formulas that he has been using. He is merely providing information, and NO ADVICE is given. Mr Aslam does not endorse or recommend any broker, brokerage firm, or any investment at all, nor does he suggest that anyone will earn a profit when or if they purchase stocks, bonds or any other investments. All stocks or investment vehicles mentioned are for illustrative purposes only. Mr Aslam is not an attorney, accountant, real estate broker, stockbroker, investment advisor, or certified financial planner. Mr Aslam does not have anything for sale.)
