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4 Simple Ways to Reduce your 2016 Tax Bill


For many of us, our 2015 tax returns are complete and we do not want to think about the IRS for months to come. However, keeping a charitable mind in 2016 may make next year’s tax appointment more pleasant and can be a great benefit to your parish, school or charity of choice. Here are a few points to remember.

Save your receipts: Itemizing deductions often produces greater savings than taking the standard income tax deduction. If you donate to your parish or another nonprofit organization, itemizing your donations with other qualifying expenses can add up to a larger deduction.

Rollover your IRA: If you are 70 ½ years of age or older, take advantage of the now permanent IRA charitable rollover legislation and transfer up to $100,000 directly from your IRA to a qualifying charity without recognizing the distribution as income.

Give now and gift later: Use your IRA rollover to open a Donor Advised Fund at the Catholic Community Foundation. You may also contribute cash, marketable securities or other appreciating assets. You will receive a full tax deduction in the year you begin and may advise grants to your parish or another eligible charity at your own pace. Contribute additional funds during later years with the same benefit.

Double your tax benefit by donating appreciated stocks: Donating appreciated securities directly to your parish, Donor Advised Fund, or another charity, rather than selling and donating cash, can double your tax benefits. It may allow you to avoid or reduce capital gains taxes while also claiming the full market value of the asset as a charitable donation. Keep in mind that in order to qualify you must have held the securities in excess of one year.

The Catholic Community Foundation is a partner for Donor Advised Funds and manages endowments for the parishes, schools and other Catholic ministries of the Diocese of San Jose. We can assist you in your charitable planning. Always consult an appropriate tax or legal professional before carrying out your charitable plans.