It is different this year…
- Start a Donor Advised Fund at The Pittsburgh Foundation or Community Foundation –
In 2021 you can donate Cash to your donor advised funds or a gift of cash to any NON-Profit organization and you will be able to deduct up to 100% of your income. Usually it is up to 60% of your income!!
- Do you have low-cost stock in your portfolio or large capital gains? A charitable donation of low-cost stock or any type of stock in 2021 will significantly reduce your taxable income for 2021!!!
- The Pittsburgh Foundation is a wonderful Community Foundation (TPF). TPF is one of the nation’s largest community foundations and they have been helping individuals and families make contributions for 75 years!!
- A gift of cash or low basis stock would greatly reduce your 2021 taxable income.
*As a Donor, you can choose which non-profit organizations to give to; the Pittsburgh Foundation will quickly approve the charitable gift and send it directly to a church, school, or non-profit of your choice. They approve of gifts on a weekly basis!
- There is a $10,000 minimum to establish your Donor Advised Fund
- Schenley Capital is an approved money manager by The Pittsburgh Foundation; we manage many donor advised funds for individuals, families, and organizations!
- You can appoint your kids to be the successor for the donor advised fund to get them involved in philanthropy early in life!
2. Max out your retirement plans – 401(k), SEP(pre-tax) and or Individual IRA(after tax). You can also contribute to an IRA for you and your spouse; $6,000 each, or if you’re +50 Yrs Old then you may contribute an additional $1,000. Everyone over age 50 may contribute $7,000 per-each-person, per-each-year. Therefore, you could make your contribution for 2021 now, and your 2022 contribution on January 1st, 2022!!
a. You can contribute to your 401(k) annually at the 2021 level of $19,500 +50 yrs Old +$6,500 = total of $26,000!!!
3. Tax Harvest – Review your Stock Portfolio and sell stocks at a loss, to match them against your gains. Take some gains to trim your portfolio and rebalance your large positions! Remember, there are no capital gains tax in retirement accounts.
4. Pay all estimated Taxes in 2021 – A way to reduce your taxable income in 2021.
5.Business Owners – Should defer income to 2022. Owners should also accelerate deductions or make purchases of equipment and invest in business expansion items. Anything which will be a business deduction. Office or plant equipment, computers, furniture things which will expand the business.
These tax saving strategies will bring large opportunities in 2021. It is all about lowering your taxable income and strategies to create useful deductions for individuals and business owners..