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Maximizing Charitable Deductions - The Benefits of Using a Donor-Advised Fund!
In his video, Kyle Moore, CFP®, discusses common misconceptions about tax deductions for charitable donations. He explains that only about 30% of taxpayers qualify for these deductions due to changes from the 2017 Tax Cuts and Jobs Act. Most taxpayers now take the standard deduction, which in 2024 is $29,200 for married couples, instead of itemizing deductions. Kyle illustrates this with an example of a household earning $150,000, showing how their itemized deductions fall short of the standard deduction, making it difficult to get tax benefits for charitable gifts.
To maximize charitable deductions, Kyle introduces the strategy of "charitable lumping." Instead of making consistent yearly donations, he suggests combining multiple years of donations into one year through a Donor-Advised Fund. This way, taxpayers can exceed the standard deduction threshold in that year, gaining more tax benefits.
Interested in learning more? Watch Kyle's full explanation on his YouTube channel. Click here to watch the video!