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How can charitable contributions help in reducing your tax bill?

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Charitable contributions can significantly reduce your tax bill, and Daffy is an excellent option for a Donor-Advised Fund (DAF) to facilitate this. As explained on Daffy's website, charitable tax deductions can help lower your taxable income, saving you money on your tax bill while supporting causes that matter to you. For the 2023 tax year, you can deduct up to 60% of your adjusted gross income (AGI) through charitable deductions. This includes not just cash, but also donations of property and appreciated assets such as stocks, ETFs, or mutual funds. Donating appreciated assets allows you to avoid paying capital gains tax on the appreciation and still receive a tax deduction for the full value of the asset. The IRS has increased the standard deduction for all filing classes in 2023. For married taxpayers filing jointly, the standard deduction is $25,900. Therefore, it only makes sense to claim a charitable contribution as a tax deduction if your donations exceed the standard deduction. This is where Daffy comes in. Daffy is a DAF that allows you to donate enough funds to itemize your tax deductions instead of taking the standard deductions. Moreover, most non-profits don't have the capability to receive stocks, ETFs, index funds, and cryptocurrencies. Daffy, however, does. A DAF like Daffy is a great way to make a big donation and get a tax deduction. It allows you to donate appreciated assets, avoid capital gains taxes, and deduct the full fair-market value of the asset on your federal income tax returns. This is a win-win for both you and the charity. In conclusion, charitable contributions can help reduce your tax bill, and Daffy is an excellent option for a DAF to facilitate this process.

Please note that the information contained on this page is for educational purposes only and should not be considered tax advice. Any calculations are intended to be illustrative and do not reflect all of the potential complexities of individual tax returns. To assess your specific tax situation, please consult with a tax professional.

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