Consider reviewing your beneficiary designations at least once a year, and update them if necessary. | Beneficiary Designations |
Child Tax Credit |
With the Child Tax Credit, you may be able to reduce your federal income tax by up to $1,000 for each qualifying child under the age of 17. |
Written by Marc R Barnes EA
December 11, 2013 |
One way to reduce your tax bill this year is to donate appreciated stock to a charity of your choice versus writing a check. This part of the tax code provides a tax benefit to you in two ways:
A Sweet ExampleWinnie and Christopher each own 100 shares of Honey, Inc. that they purchased for $1,000 three years ago. Today the stock is worth $5,000. Winnie sells the stock and donates the proceeds to "Save the Bees" while Christopher donates his stock directly to "Honey Overeaters: Finding a Cure". Assuming a 15% long-term capital gains tax rate*, a 25% income tax bracket, and no other limitations: Not only does Christopher see $750 in additional federal tax benefit by donating his appreciated stock, but Honey Overeaters has $600 in additional funds to use for their charitable program. * Long-term capital gains tax rates on this type of investment can be as high as 23.8% for those in the 39.6% income tax bracket. Other benefits
Things to consider
If you think this opportunity is right for you, please contact a trusted advisor to ensure you handle the donation correctly. Copper Canyon Tax and Accounting Services is a full service provider of business accounting, business income tax, personal income tax, and payroll in Tucson, Arizona. Share:
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Topic: Marriage and Family |