One way to reduce your tax bill this year is to donate appreciated stock to a charity of your choice versus writing a check. This part of the tax code provides a tax benefit to you in two ways:
Higher deduction. Your charitable gift deduction is the higher Fair Market Value of the appreciated stock on the date of your donation and not what you originally paid for it.
No capital gains tax. You do not have to pay tax on the profits you made on the stock. As long as you have owned the investment for over one year, you can avoid paying long-term capital gain tax on the increased value of your stock.
Other benefits
The Alternative Minimum Tax (AMT) does not impact charitable deductions as it does with other deductions.
Remember this approach also provides more funds to your selected charity. By donating cash or check, those additional funds are instead paid as federal taxes.
This tax benefit could be worth even more with an increase in the maximum long-term capital gain tax rate and the introduction of the potential 3.8% Medicare surtax for investments.
This benefit is for everyone who itemizes deductions that have qualified assets, not just the wealthy.
Get More Info : Accounting Firms
online accounting services for small business
Websites : https://bas-pc.com/