In 2023, common tax deductions that people can take on their returns include home mortgage interest, medical and dental expenses, interest from a home equity loan or HELOC, and state and local taxes on personal property. However, it's important to note that you can only take advantage of these deductions when you itemize.
One of the most significant deductions that often gets overlooked is the charitable tax deduction. Unfortunately, you can't take charitable tax deductions without itemizing. But don't worry, there are strategies available to help you itemize your deductions even if you don't have enough charitable contributions to meet the limit.
One such strategy is called bunching, which involves combining multiple years' worth of charitable contributions into a donor-advised fund (DAF) in a single tax year to surpass the limit and itemize your deductions. This is where Daffy comes in as a great option for a DAF.
For example, if you're a single taxpayer who donates $7,000 to charity each year, you may find that your charitable contributions alone don't exceed the standard deduction threshold of $13,850. But by bunching two years' worth of contributions in a single tax year, you double your charitable contributions to $14,000, thereby exceeding the threshold.
The beauty of Daffy is that it makes bunching charitable contributions easy. You simply contribute the amount you wish to bunch to your Daffy fund and immediately receive a tax deduction for that amount. Then, distribute the funds to your desired organizations whenever you're ready. This way, you can continue to donate $7,000 annually in both 2023 and 2024 by using the funds you set aside in Daffy.
By maximizing your charitable tax deductions with Daffy, you can reduce your tax bill while also supporting the causes that are most important to you. So why wait? Start giving and saving more with Daffy today.
Please note that this information is for educational purposes only and should not be considered tax or investment advice. To assess your specific situation, please consult with a tax and/or investment professional.
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.