» To Save on Taxes, Make Charitable Gifts Before Year’s End

To Save on Taxes, Make Charitable Gifts Before Year’s End

White Plains, NY (Law Firm Newswire) December 16, 2013 - If one wishes to make charitable gifts as part of a tax-saving strategy, now is the time.

New York Elder Law and Estate Planning Attorney Bernard Krooks

Although tax returns are not due until April 15, December is an excellent time to do a “dry run” on one's tax return in order to establish an estimate of what one expects to pay in taxes. A dry run can also help to determine what charitable giving is possible before the end of the year in order to reduce taxable income and lower tax bills. Newly retired individuals may especially benefit from such an evaluation of their tax returns, as retirees are often unclear on how to manage taxes in retirement.

If there are problems with withholding on pensions, Social Security or IRA withdrawals, then an individual may end up paying penalties and interest at tax time. IRA account owners can make use of one key strategy to deal with any underpaid taxes: it is possible for IRA owners to make a distribution but withhold the whole sum for taxes. The IRS will not consider the payment late, but instead treat it as taxes paid throughout the year.

Charitable IRA rollovers offer seniors another IRA strategy. After age 70 1/2, owners of traditional IRA accounts must begin taking required minimum distributions. However, they can make direct transfers of up to $100,000 from an IRA to qualified charities. These transfers count toward the required minimum distribution and do not count as income.

One may also wish to make gifts to friends and family members before the end of the year without triggering a gift tax. The limit is $14,000 for individual givers and $28,000 for married couples, and gifts may be made to as many individuals or couples as a person wishes.

Anyone wishing to make charitable contributions before the end of the year should be aware of the rules needed to time different types of gifts so that they count for the current year.

When donating to a charity by check, the effective date of the donation is the date the check was mailed. When giving to non-charity donees, the gift is effective when the check clears.

Giving stock to a charity by certificate form is effective on the date of transfer in the records of the issuer. Giving stock to a charity by electronic transfer is effective on the date the issuer shows that the stock is received (which can take several days). For non-charity donees, the gift is effective when the transfer is made on the books of the corporation (which can take weeks).

New York Contact:
Maria M. Brill
Littman Krooks LLP
(914) 684-2100
[email protected]

New York City Office
655 Third Avenue, 20th Floor
New York, New York 10017
(212) 490-2020 Phone

Westchester Office
399 Knollwood Road
White Plains, New York 10603
(914) 684-2100 Phone

Dutchess Office
300 Westage Business Center Drive, Suite 400
Fishkill, NY 12524
(845) 896-1106 Phone

  • Things for Seniors to Consider Before Remarrying
    To a young couple starting a family, marriage may seem like an obvious step. For those in their golden years, however, remarrying can involve some potential complications that they should be aware of. Marriage later in life can complicate the estate plans of each spouse, especially if either or both of them have children from […]
  • Nursing Home Residents Will Soon Have Greater Rights
    Update (12/1/2016): “The rule was supposed to take effect Nov. 28, but the American Health Care Association, an industry group that represents most nursing homes in the U.S., filed a lawsuit in October to block the rule, which it called “arbitrary and capricious.” To read more, click here.   A rule change by a federal […]
  • 2016 Walk To End Alzheimer’s
    Littman Krooks was a sponsor of the Alzheimer’s Association’s Walk to End Alzheimer’s at White Plains High School held this past September 2016. The walk, organized by the Alzheimer’s Association, the largest non-profit funder of Alzheimer’s disease research. The organization is supported by local chapters that raise awareness and offer resources to people and their […]

See other news sources publishing this article. BETA | Tags: , ,



Get headlines from Law Firm Newswire sent right to your inbox.

* indicates required