How to Bunch Deductions and Save Money

Check out Betty’s blockbuster savings!

 

As part of the new tax bill introduced in 2017, the Federal government doubled the standard deduction from $12,000 to $24,000, and an estimated 30 million US households lost the ability to itemize deductions like charitable contributions, property taxes, and mortgage interest.

For example, our friend “Betty” has $20,000 in itemized deductions each year ($5,000 in property taxes, $5,000 in charitable, $10,000 in mortgage deductions).

 

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Because the new standard deduction is $24,000, it no longer makes sense for her to itemize each year. She can just take the higher standard deduction – right?

Well, if Betty plans her taxes a little more carefully, there is an opportunity to use BOTH the standard deduction and the itemized deduction. As an example, in some cases, Betty can choose to pay her property taxes early/late and control what year in which they are paid. She also can decide to lump her charitable donations in every other year versus every year.

 

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The benefit of doing this, she is able to increase her itemized deductions by $12,000 over four years or roughly $3,000/year. This could save her anywhere between $400 and $1,200 per year in taxes just by being smart about how she uses the itemized deduction.

If you’re in a similar situation as Betty, let’s talk.  At Lenox, we pride ourselves on helping people make smart money moves at every opportunity.

 

At Lenox, we work closely with people of all ages to help guide you in every aspect of your financial life –– from wealth creation, wealth building and wealth management, to career planning and coaching, funds for education, retirement planning, working through financial hurdles, and more.  In every instance, we start with you, not your portfolio to help you FUND A LIFE YOU LOVE™.

If you’re ready to discuss financial, business, career and life planning that will allow you to Fund a Life You Love®, we’d love to tell you more.  Let’s talk.  It’s your tomorrow. Call us for a complimentary 1-hour review.  Call 513.618.7080 or visit www.lenoxwealth.com to Fund a Life You Love.

 

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This blog is limited to the dissemination of general information pertaining to its investment advisory/management services. This is not intended to be personalized investment advice. Please contact a Lenox adviser if you would like additional information.