In 2023, the standard deduction for all filing classes has increased. For instance, if you were married and filing jointly, the deduction has risen from $25,900 in 2022 to $27,700 in 2023. While this more generous deduction can lower taxable income for many taxpayers, it also means you must surpass a higher threshold to itemize your deductions.
However, there is a tax strategy called “Bunching” that many people use to lower their tax bill with charitable deductions. Charitable giving tax deduction limits are set by the IRS as a percentage of your income. Similar to 2022, cash contributions in 2023 can make up 60% of your AGI. The limit for appreciated assets in 2022 and 2023, including stock, is 30% of your AGI. Contributions must be made to a qualified organization.
This is where Daffy comes in as a great option for a Donor-Advised Fund (DAF). With Daffy, you can start saving more on your taxes and give to the causes and organizations you care about. However, it's important to note that in order to take a tax deduction for your charitable contributions in 2023, your total deductions must exceed the standard deduction for your tax filing status.
Navigating the latest IRS tax updates from 2022 to 2023 can be challenging, but Daffy has put together a comprehensive guide to help you maximize your charitable contributions. This guide includes updated tax brackets, charitable deduction limits, and much more.
In conclusion, the increase in the standard deduction for all filing classes in 2023 presents an opportunity to reassess your tax strategy and consider how you can make the most of your charitable contributions. Daffy is a great option for a DAF, providing you with the resources and guidance you need to navigate these changes and continue making an impact on the causes you care about.
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.