[Case Study] How to Turn Charitable Giving Into $100k+ Tax Deductions

Ready For Retirement

James Conole, CFP®

Investment Planning, Bonds, Education, Stocks, Cash, Business, Dividend Investing, Retirement Planning, Retirement, Investing, Tax Planning

5 • 706 Ratings

🗓️ 28 July 2020

⏱️ 22 minutes

🔗️ Recording | iTunes | RSS

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Summary

On this episode of the Ready for Retirement podcast, James discusses a strategy for increasing your tax savings through charitable giving. James gives the example of a couple who contributed $12,000 to charity every year but they were still taking the standard deduction every year on their taxes, so they were never able to reap any tax deduction benefits from their contributions. He helped them set up a Donor Advised Fund into which they could contribute a large sum of money that could...

Transcript

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0:00.0	Discover the tips and strategies that will help you achieve your retirement goals.
0:09.3	I'm your host, James Canole, and this is the podcast dedicated to helping you retire well.
0:14.6	It all starts right here to Ready for Retirement. I'm your host, James Cannell, and today's
0:29.4	going to be a fun episode. Today we're going to talk about how you could potentially save
0:32.3	tens of thousands more dollars in taxes through a better giving strategy, Not by giving more, but just by using a different
0:39.4	strategy and how you do it. And it's going to be fun because we're going to actually use a case study.
0:42.7	So I got some feedback from listeners that rather than just addressing financial topics and giving
0:47.9	information, which is very valuable, but actually working through a case study might be helpful.
0:52.1	So you can start to see how you can apply certain principles to your own financial situation by using someone else as an example. So that's what we're
0:57.9	going to do. I'm of course going to admit names, but these are real case studies that have actually
1:02.0	worked through with clients. And I think it'll be helpful. Now, if you don't do any charitable giving
1:06.5	just on the front end of this, this particular episode probably won't be relevant to you. So I'll save you some time on the front end that there's plenty of other great episodes that
1:12.7	you can tune into. But the specific goal for this episode is to understand how a better
1:17.5	charitable giving strategy could potentially save you thousands and tens of thousands of dollars
1:22.6	in taxes over the course of your retirement. So just a little bit of background on this.
1:26.5	New tax law took effect in 2018.
1:29.3	So what that new tax law did, among other things, was it raised the standard deduction.
1:33.6	And for a married couple this year in 2020, the standard deduction is $24,800.
1:39.0	If you're both over 65, it's actually $27,400. And if you're single and under that age, it's half of that. So just for the
1:47.0	sake of simplicity, what I'm going to do is I'm going to assume the number of $24,800. So that will be
1:52.8	the number that I'm using for the standard deduction as we walk through this different example or through
1:56.5	this example here. So let's jump right in. What is a standard deduction? Well, the standard deduction,
	...

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