The Money Mustache Community
General Discussion => Post-FIRE => Topic started by: JCfire on August 23, 2016, 07:55:05 AM
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I assume most post-FIRE on this forum are far from the top tax bracket and rarely/never itemize returns. If you fit this category, do you still donate to charity? Is the amount of the donation financially meaningful to you? Do you do anything creative to reap some tax benefit from the donation more similar to what a high income itemizer would receive? Did you do anything before FIRE to prepare for future giving?
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I assume most post-FIRE on this forum are far from the top tax bracket and rarely/never itemize returns. If you fit this category, do you still donate to charity? Is the amount of the donation financially meaningful to you? Do you do anything creative to reap some tax benefit from the donation more similar to what a high income itemizer would receive? Did you do anything before FIRE to prepare for future giving?
We made (and will likely make one more) large charitable contribution to a donor advised fund with Vanguard charitable in our highest income years immediately before FIRE. We get the tax deduction for the entire amount in the year the funds are transferred to the donor advised fund, so we get the maximum tax benefit since this is currently the point in time we will have the highest taxable income, we also got an added tax benefit by donating appreciated shares.
The funds we donated are invested tax free, and then we can direct them to charitable organizations in the future, i.e. when we are FIRED. So we get the tax benefit while working, and the charities get the money throughout the rest of our lifetime as we decide.
I wrote more about our experience here (http://www.fi35.com/giving-until-it-hurts-the-taxman/)
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Excellent; I am assuming that I will either make my full lifetime donations during my high income years or, if I am still deciding who to give to, use the DAF route. Thanks for the input.
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I assume most post-FIRE on this forum are far from the top tax bracket and rarely/never itemize returns. If you fit this category, do you still donate to charity? Is the amount of the donation financially meaningful to you? Do you do anything creative to reap some tax benefit from the donation more similar to what a high income itemizer would receive? Did you do anything before FIRE to prepare for future giving?
We made (and will likely make one more) large charitable contribution to a donor advised fund with Vanguard charitable in our highest income years immediately before FIRE. We get the tax deduction for the entire amount in the year the funds are transferred to the donor advised fund, so we get the maximum tax benefit since this is currently the point in time we will have the highest taxable income, we also got an added tax benefit by donating appreciated shares.
The funds we donated are invested tax free, and then we can direct them to charitable organizations in the future, i.e. when we are FIRED. So we get the tax benefit while working, and the charities get the money throughout the rest of our lifetime as we decide.
I wrote more about our experience here (http://www.fi35.com/giving-until-it-hurts-the-taxman/)
I agree 100% with CanuckExpat. This is what we did, and is unquestionably the best strategy.
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Post-FIRE, we mostly donate our time, not our money. The only donations are things like tickets for charity events like pancake breakfasts.
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When I was FIRE'd, I still donated to charity, though less than when I was working.
I started working again part time with the intention of just using the money for charity.
But I screwed up and ended up actually working nearly full time hours again. I failed early retirement. :) I now give a good percentage of that money to charity, but not all of it.
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5 years post-fire. I'm just below the 40% tax bracket in the UK, so there are no tax benefits to me to donating although the charities get the 20% gift aid add-on based on the basic rate tax I pay. I gave 5% of my income to charity last year, plus about £1k in donated goods from my mother's and aunt's estates. It wasn't a financially meaningful amount to me, although I hope it was to the recipients. I'm thinking about upping it to 10% this year. I do give several hours a week as well.
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I do not give money directly to charity, but I donated my used car and other stuffs to charity. I support my parents and my disabled sister in terms of cash money and medical expenses. Occasionally, I give small amounts of money to poor and old people on the streets or markets in less developed countries when I travel there. In other words, I like to give money directly to those who need the money, in my own opinion.