Many people know that charitable giving can reduce their income taxes, but many don't realize how much it can benefit them in other ways. A tax attorney can assist with these types of strategies and help maximize their charitable giving impact, as well as ensure that their financial goals and estate plans are optimized.
Cash donations are the most common form of charitable giving, but there are also other options. For example, donating appreciated securities can provide a significant tax benefit for both the donor and the charity. This strategy can be especially beneficial for high-income individuals, since it can eliminate capital gains taxes.
Non-cash assets like real estate, artwork and collectibles are another popular option for making a charitable donation. These gifts can also reduce a donor's capital gains taxes, depending on the nature of the donated property and its relation to the charitable organization's mission.
Gifting non-cash assets can be difficult for some donors to accomplish, as the IRS sets annual deduction limits on donations of these kinds of assets. These limits are 30% of adjusted gross income (AGI) for contributions of non-cash assets held more than one year and 60% of AGI for donations of cash.
Donor-advised funds are a special type of charitable account that can make it easier for donors to make large contributions in a single year, while still allowing them to receive tax benefits over time. In addition to the immediate tax deduction, the fund allows donors to recommend grants over time and invest the money, resulting in a potential for growth and additional tax savings.
Assets such as stocks, bonds and mutual funds can be a valuable contribution to a nonprofit organization. These assets can be given directly to a charity, or they can be transferred to a donor-advised fund.
The key to these giving vehicles is to make sure the donations are directed toward a cause that aligns with the donor's mission and values. A tax attorney can review a donor's portfolio to determine whether they are making the right type of investments for their charitable giving goals.
Life insurance policies, including whole life and universal life, are another great way to make a large charitable gift. These policies can be used for a variety of charitable purposes, as they offer substantial tax advantages, while providing important protection against death and financial loss.
Donating long-term appreciated non-cash assets such as stocks, bonds and real estate can be particularly tax-efficient. These kinds of assets can be donated to a charity and can generally be deducted for their full fair market value, rather than being taxed at the capital gains rate.
In addition, if the charity is a public charity, the donation can be eligible for a tax credit for a portion of the donor's state taxes as well. In these situations, a tax attorney can work with the charitable organization to obtain the appropriate tax credit for the donor.
In order to maximize your tax savings, it’s crucial to understand the difference between tax credits and tax deductions. They both decrease your taxes, but they do it in very different ways.
Credits directly reduce the amount of taxes you owe, while deductions lower how much of your taxable income you pay.
Tax credits can be either refundable or nonrefundable, and they may also affect your marginal tax bracket.
Refundable tax credits can save you a lot of money in the end because they eliminate your tax liability and leave you with only the remaining value of the credit.
The Earned Income Tax Credit (EITC) is one example of a refundable tax credit. It can reduce your tax liability by as much as $4,490.
Another tax credit that can save you money is the American Opportunity Tax Credit. It can reduce your tax liability by as little as $2,500, and it’s refundable.
If you have any questions about your tax credits or deductions, it’s important to consult with a tax planning lawyer. They will be able to help you determine which ones you qualify for and how to use them to your advantage.
If possible, it’s best to keep all receipts for your business expenses as long as they are related to your job. This can help you avoid any IRS audits or other issues that may arise during the filing process.
You can also purchase an expense report solution for your practice to automate the recording of all business expenses so that you don’t need to worry about doing it manually. By taking this step now, you can maximize your savings come tax time.
There are many different types of tax deductions that you can claim on your return. They include business-related expenses, such as rent payments on commercial properties. They can also be for travel and meal expenses related to your work, as well as a variety of miscellaneous expenses.
A tax planning lawyer will be able to guide you through this process and ensure that your documentation is accurate. They can also answer any questions you have about your tax situation and help you avoid penalties.
When hiring a tax attorney, it’s important to find someone with a solid track record and extensive experience. They should be licensed to practice in the jurisdiction where your case will be heard and should understand all aspects of the legal process.
The right tax lawyer can make a huge difference in how your tax situation turns out. They can guide you through the entire process, including negotiation with the IRS and other tax authorities.
Tax laws are constantly changing, and the more familiar you are with the current tax rules, the more likely you are to save money on your taxes. A good tax planning attorney will stay abreast of the latest changes and make sure that you’re maximizing your available tax deductions.
There are many things that can go wrong when you try to navigate international tax issues on your own, so it is important to work with a professional who understands the ins and outs of the international tax world. They will be able to give you the information you need to make the right decisions and avoid costly mistakes that could lead to a major financial loss.
The first thing that you should do is document everything that happens when it comes to your business and your personal finances. This will ensure that you have all of the evidence that you need if you are ever audited. This will also help you prove that you are eligible for certain tax credits and deductions.
A professional will also be able to advise you about the best tax structures that are available for your situation. These structures may include foreign trusts, international entities, foundations and other structures that can protect your assets and reduce the amount of taxes that you owe.
Another important aspect of international tax planning is to identify and take advantage of any tax incentives that are offered by different countries. These can include tax holidays, investment tax credits, and research and development incentives.
It is also crucial to understand how transfer pricing rules work. These rules govern how multinational companies allocate profits between subsidiaries in different countries. They are designed to prevent companies from shifting profits around to countries with lower tax rates.
This is a very complex area of tax law, and it is crucial to consult with a professional who can provide you with the guidance that you need to avoid common mistakes and to take advantage of any global tax savings opportunities that may be available to you.
Expatriate international tax planning and compliance is an essential consideration for individuals who are moving abroad or are earning income from abroad. This can involve identifying and utilizing various tax credits and deductions that are available to you in different countries, as well as navigating complex international tax treaties.
A professional will be able to help you determine the best way to structure your business and investments before you move abroad. This can include establishing offshore accounts, international entities and foundations, as well as adjusting your investments to minimize the amount of taxes that you owe.
One of the most important things to consider when preparing your taxes is to understand how you can claim the foreign earned income exclusion. This will allow you to avoid paying taxes on your worldwide income and instead pay taxes on the income that is earned in your home country.
The best tax professionals will be able to help you determine the most tax-efficient ways to structure your business and investments before you move overseas. They will also be able to guide you through the process of registering and filing your tax returns in your new country and ensuring that you comply with all of the international tax laws.
New York Legacy Lawyers by Yana Feldman & Associates PLLC
132 32nd St, Brooklyn, NY 11232, United States
(718) 713-8080