When deciding the amounts of deductions on taxes, taxpayers have two options to consider.
First, you can itemize deductions, which is often done by farmers, small business owners and those who give a lot to charities.
The other method for deductions is to simply deduct a flat amount each year. That’s referred to as taking the “standard deduction.”
The standard deduction recently went up significantly, so more people are expected to take the standard deduction. With more people taking the standard deduction, it’s likely that people won’t be as driven to give to charity without a tax decrease associated with the giving.
However, the qualified charitable distribution allows people over 70 1/2 who have at least one IRA to take both the standard deduction but still get savings for charitable giving.
Each of us is generally required to pay “income taxes” on the money we earn each year.
However, the government allows us to preclude some of that earned money from being taxed. The amounts for which tax is not required to be paid are called deductions, because their amounts are deducted from the total income that is taxed.
Read more about tax savings for those over 70 1/2 years of age in Lee’s article in the Lima News here: Legal-Ease: Tax savings for people over age 70 1/2
Source: LimaOhio.com, “Legal-Ease: Tax savings for people over age 70 1/2,” by Lee R. Schroeder, September 28, 2019
Lee R. Schroeder is an Ohio licensed attorney at Schroeder Law LLC in Putnam County. He limits his practice to business, real estate, estate planning and agriculture issues in northwest Ohio. He can be reached at Lee@LeeSchroeder.com or at 419-659-2058. This article is not intended to serve as legal advice, and specific advice should be sought from the licensed attorney of your choice based upon the specific facts and circumstances that you face.