Generous Taxpayers Plan Charitable Giving

Physician's Money Digest, December 2005, Volume 12, Issue 16

Research Recommendations

Donating to your favorite charity is awonderful way for physicians to give back totheir community.When it comesto tax planning,though, sometimesyour bestintentions canbackfire, specificallyif you happento givemore than 20%of your adjustedgross income(AGI) to charity. According to the NationalInstitute of Business Management's, tax lawslimit the charitable donation deduction to20% to 50% of your AGI annually,depending on the type of charity. A 50%limit applies to qualified public institutionssuch as hospitals, churches, andschools, and also some private organizations.A 30% limit applies to qualifiedorganizations not included in the 50%category, such as veterans associationsand fraternal societies. Plus, a special limitof 30% applies to capital gain donationsgifted to 50% limit charities and a 20%limit applies to non-50% limit charities.The good news is that you can carry overany donations that exceed your AGI limitsin the current year for the next 5 years oruntil the donation amount is gone.Confused? Ask your accountant to clarifythe laws before you open your checkbook.For more information on charitable donationguidelines, you can access IRSPublication 526 at www.irs.gov/pub/irs-pdf/p526.pdf.