Author Topic: Charitable contributions - Optimal amount to maximize 2016 US income tax credits  (Read 980 times)

BadassEm

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Has anyone figured out how to determine the optimal amount of charitable donations in order to maximize 2016 income tax credits?  I'm trying to figure this out right now but imagine one of you MMM brainiacs have already done so.  If you could please share the formula, that'd be amazing.  I'm talking cash donations but would also be interested in non-cash (clothing, etc.)

I've donated over the year, both cash and non-cash, but have never reported my donations in my income tax filings.  I believe there may also be a first-time donor's super credit, is that correct?

Thanks in advance!

Rocketman

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Your donations are part of your itemized deductions, so it depends on all your other itemized deductions, state taxes, property taxes, medical expenses, and a few other select items. There is no super first time donation. If you go to IRS.gov and search for Schedule A, that will give you the proper info.


MDM

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If you enter the rest of your numbers into the case study spreadsheet, you could change  the column input cell to B65 for the data table that goes from P61 to R562 (fills the bold outline).  That will show the marginal savings rate for different amounts of charitable contributions.

Here's what one gets for the very simple case of a single taxpayer making $8K/mo with no other deductions:


The "Something" in the chart title is because "charitable contributions" isn't one of the pre-identified independent variables for that chart

Of course, YMMV so you'd have to enter your specific numbers.