Show These tax planning strategies may help you reduce your tax bill while potentially maximizing your ability to give to others.Charitable giving comes in many forms. But whether it’s donating cash, cryptocurrency, publicly traded stock, real estate, a business, or something else, increasing your knowledge of tax planning strategies could help reduce the amount of money you may owe while potentially maximizing your gift. “Taxes aren’t something many people prefer spending a lot of time thinking about,” says Wells Fargo Private Bank’s Bill Bardwell, CFP®, CTFA, a philanthropic trust advisory specialist, senior vice president within the Wealth & Investment Management division. “But it can really be worth your time. It also means having discussions with your relationship manager, CPA, attorney, and other wealth advisors to make sure all the nuances are covered.” Here, Bardwell shares some things you should consider when it comes to tax planning and charitable giving. When preparing your tax return for 2022As you think about your 2022 tax return, be aware that certain charitable contribution deduction provisions implemented for the 2020 and 2021 tax years are no longer available. That means the deduction for cash contributions to public charities is no longer up to 100% of adjusted gross income (AGI) for those who itemize. Be sure to consult with your tax advisor to learn the latest on allowable deductions for charitable donations of cash and property as well as potential carryover opportunities. When tax planning for 2023
Considerations when gifting to individuals
Consider giving strategies throughout the yearBardwell stresses that tax planning and charitable giving should be something that you consider year-round—not just at year-end. In fact, tax planning and charitable giving should be considerations before any major financial transaction is taking place. “We have seen some clients who sell an asset (business, real estate, etc.) and call after the fact, unfortunately resulting in their missing out on some potential tax benefits,” Bardwell says. Plus, thinking of charitable giving as a year-end activity means that you could be missing out on the ability to make a larger impact with your gifts. “If you’re waiting until the end of the year before considering donating money, you may have missed opportunities to assist those in need,” he says. “Thinking about the effects of the pandemic and now inflation, both have exposed a lot of needs out there that aren’t limited to a certain time of year.” Communicating with your relationship manager and tax and legal advisors on a regular basis can also help you stay informed about any upcoming changes in tax laws, Bardwell adds. That knowledge can help you stay proactive so you can maximize your giving. Wells Fargo Wealth & Investment Management (WIM) is a division within Wells Fargo & Company. WIM provides financial products and services through various bank and brokerage affiliates of Wells Fargo & Company. The Private Bank offers products and services through Wells Fargo Bank, N.A., Member FDIC, and its various affiliates and subsidiaries. Wells Fargo Bank, N.A. is a bank affiliate of Wells Fargo & Company. Please consider the investment objectives, risks, charges and expenses carefully before investing in a 529 savings plan. The official statement, which contains this and other information, can be obtained by calling your financial advisor. Read it carefully before you invest. |