Give and Gain     

Let’s start with the basics: Do you take a standard deduction or do you itemize your deduction? Standard deduction refers to the portion of income not subject to tax that can be used to reduce your tax bill and is a specific dollar amount, depending on filing status. While taking the standard deduction works for most people, itemized deductions work better for others.

Itemized deductions, created in order to incentivize taxpayers to take certain actions such as buying a house and making donations to charity, vary for each individual. These are basically expenses allowed by the IRS that can decrease your taxable income, including things like unreimbursed medical and dental expenses, home mortgage interest, and charitable donations.

There’s a limit to how much you can deduct for charitable donations. The basic rule is that your contributions to qualified public charities, colleges, and religious groups generally can’t exceed 60 percent of your Adjusted Gross Income (AGI). (For 2021, you can give 100 percent of income.) The caps are a bit lower for gifts to other types of nonprofits (such as donor advised funds and private foundations). When it comes to gifts of appreciated property, the limit drops to 30 percent of AGI.

So it’s mid-December, and you have just a short time to make a donation and reduce your tax bill (pending your accountant’s advice). Below is a list of five strategies you can employ for end of year charitable giving.