Craig Wear, a CFP, explains why you need a CPA: charity deductions have income limits, and timing matters. Certain moves like conversions can bump you into a higher tax bracket, making deductions worth more that year. He coordinates with CPAs to handle this.
And you need to check with a CPA or your tax preparer, because there are limitations to how much of your adjusted gross income can actually be given to a charity. And you also get the tax deduction in a year. If you have a strategy and you know what you're doing, there are some opportunities to really cash in on some great tax savings, because while you're doing these conversions, you're likely going to be at a much higher tax bracket than what you will later. And so those tax deductions become pretty significant on a percentage basis to make all that stuff work for you. So, again, this is something that we like to have clients double check with their tax preparers, and we work with a network of our own CPAs that we work with as well. Then we just try to make sure that we manage how that works. All right, so there's the first three.
