Sample interview questions: Can you provide examples of tax planning strategies you have implemented to optimize tax deductions for charitable contributions?
Sample answer:
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Charitable Remainder Trusts (CRTs):
- Transferring highly appreciated assets to a CRT can generate a current income tax deduction while retaining a lifetime income stream from the trust. Upon termination, remaining assets pass to designated charities.
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Qualified Charitable Distributions (QCDs):
- Taxpayers age 70.5 or older can make direct distributions from an IRA to qualified charities. QCDs are excluded from the taxpayer’s gross income, potentially reducing taxable income and lowering Medicare premiums.
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Bunching Donations:
- Instead of making small charitable contributions each year, consider combining several years’ worth of donations into a single year to exceed the standard deduction limit, triggering substantial tax savings.
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Donor-Advised Funds (DAFs):
- Contributing to a DAF allows immediate tax deductions while providin… Read full answer