vania-janet/multiturn-rag-retrieval-data huggingface dataset:
I don't do corporate tax exclusively, but I don't think you're correct. The idea of pre-tax and post-tax earnings is significantly different from corporations than individuals since individuals see their taxes come out when they earn it and corporations pay taxes quarterly.  At the very least, it's certainly not equivalent to a charitable contribution.
You can reduce your capital gains taxes in two ways (USA), off the top of my head:
Reducing your income by 20k is guaranteed to lower your tax bill by less than 20k (because there are no tax rates greater than 100%).  Your goal shouldn't be to minimize taxes but to maximize total net income.
Assuming you are in the US, and are an average joe, the answer to your question is no. Investment costs do not reduce your taxable income for the year you make the investment. They do factor in to the cost basis of your investment and so will affect your taxes in the year you sell the investment. If you want to reduce your taxable income, you could contribute the $5000 to a traditional ira, or 401k, assuming you qualify. Depending on where the account is held, you may then be able to use that $5k to purchase stock in the company you are interested in. The stock would be held in your IRA or 401k account, and would be subject to more restrictions than a normal brokerage account.
"It really depends on what your goals are.  If your intent is to benefit the charity, I'm sure that they would tell you that the sooner you give them the money, the better. If they think that the money would do them more good invested then spent, they will invest it.  The money you have sitting in your ""charitable account"" doesn't benefit anyone until you give it away. It really doesn't benefit you, either. You take your tax deduction when you contribute, and it is really out of your hands at this point.  The only reason I could see for using a charitable account this way is if you don't know who you want to give money to. If this is the case, you can contribute money to your charitable account now and take the tax deduction now, and wait to identify a worthy charity later.  But if I were you, I wouldn't wait too long to find someone to give the money to. There are lots of good organizations that would do a lot of good with that money, and the sooner they get it, the better. If you skip the charitable account and donate directly to them on a regular basis, you can experience the joy of partnering with a charity to help people. If you decide in the future to switch to a different charity, then you do so. Waiting until the ""right time"" to donate doesn't really do anyone any good."
"If you file the long-form Form 2210 in which you have to figure out  exactly how much you should have had withheld (or paid via quarterly payments of estimated tax), you might be able to reduce the underpayment penalty somewhat, or possibly eliminate it entirely.  This often happens because some of your income comes late in the year (e.g. dividend and capital gain distributions from stock mutual funds) and possibly because some of your itemized deductions come early (e.g. real estate tax bills due April 1, charitable deductions early in the year because of New Year resolutions to be more philanthropic) etc.  It takes a fair amount of effort to gather up the information you need for this (money management programs help), and it is easy to make mistakes while filling out the form. I strongly recommend use of a ""deluxe"" or ""premier"" version of a tax program - basic versions might not include Form 2210 or have only the short version of it. I also seem to remember something to the effect that the long form 2210 must be filed with the tax return and cannot be filed as part of an amended return, and if so, the above advice would be applicable to future years only. But you might be able to fill out the form and appeal to the IRS that you owe a reduced  penalty, or don't owe a penalty at all, and that your only mistake was not filing the long form 2210 with your tax return and so please can you be forgiven this once? In any case, I strongly recommend paying the underpayment   penalty ASAP because it is increasing day by day due to   interest being charged.  If the IRS agrees to your eloquent   appeal, they will refund the overpayment."
Are you being willfully obtuse? Of course you can do both. However, had you never been taxed you'd have that same money to spend as you see fit, such as giving it to charity. Mind blowing right?   Oh so you know how to spend that money better huh? Maybe I say I know how to spend your money better than you. Fuck your charity for down syndrome. People with prostate cancer need it more. Here's your tax bill :)
It is important to remember that the tax brackets in the U.S. are marginal.  This means that the first part of your income is taxed at 10%, the next part at 15%, next at 25%, etc.  Therefore, if you find yourself just on the edge of a tax bracket, it really does not make any difference which side of that line you end up falling on. That having been said, of course, reducing your taxable income reduces your taxes.  There are lots of deductions you can take, if you qualify.  Depending on what type of health insurance coverage you have, a Health Savings Account (HSA) is a great way to shelter some income from taxes.  Charitable contributions are also an easy way to reduce your taxes; you don't really personally benefit from them, but if you'd rather send your money to a good cause than to Uncle Sam, that's an easy way to do it.
Consider the individual who pays $1,000,000 in taxes.  His/her income must be substantial.  That is what one should aim for.  Investments for the most part, do not lower ones taxes.   In one of John Grisham's novels, tax shelters are being discussed.  Sorry, I do not remember which book.  The discussion goes something like this: There are a few investments which can lower your taxes.  Purchase a house.  Mortgage interest on your principle residence is deductible (if you itemize deductions).  If you don't itemize, focus on increasing income to the point where itemizing benefits you. In general, businesses have more deductions than individuals.  Own a small business. You (or your accountant) will discover many deductions.  Hint: the company should lease a car/truck, many meals are now deductible.  This is not the reason to own a business.
"Does your company offer a Medical Savings Account? That can allow you to reduce your taxable income. You normally have to join during ""open season"". Another option is Medical and Dental Expenses above 7.5% of your adjusted gross income. This is a high hurdle to meet, and only reduces your taxes by the tax rate x the amount your bills exceed 7.5%"
The Government self-assessment website states you can ask HMRC to reduce your payments on account if your business profits or other income goes down, and you know your tax bill is going to be lower than last year. There are two ways to do this:
I'm not sure cost of capital would decrease that substantially. I have a feeling people still need to find a home for their money - as such it'll simply lower interest rates in order to offset the loss of deduction. IMO it would be quite inflationary.  Edit: I do not think this is a good idea, to be clear.
People put conditions on donations all the time. They donate to the Red Cross for a specific disaster. The donate money to a church for the building fund. They donate money to a hospital to buy a new x-ray machine. They donate money to the scouts for a new dining hall.  It is possible to donate money to a non-profit for a specific purpose. If the non-profit doesn't want to accept the money with those strings they can refuse. Generally these specific projects are initiated by the non-profit. But there is no requirement that the idea originate with the non-profit.  It is also up to the non-profit and their legal advisers regarding how strictly they view those strings. If you donate money for web design and they don't spend it all, can they pay net years hosting bill with the money, or must they hold it for a few years for when they need a designer again? If the company wants to provide the service, they can structure the project to pay their employees for their time. They pay employees for $100 of labor while deigning the website. The pay and benefits reduce profit thus lowering taxes.  Donating money to the non-profit to be given back to the company doesn't seem to be the best way to structure transaction. At best it is a wash.  Donating money to a charity and then directing exactly which contractor will perform the service starts to look like money laundering, and most charities will get wary.
Depending on the state you live in paying interest on a mortgage opens up other tax deduction options: Real estate taxes, Car tax, donations. See schedule A http://www.irs.gov/pub/irs-pdf/f1040sa.pdf The shocking bottom line is that it never works to your advantage in the short term. Owning your house: But there are big risks, ask anybody stuck with a house they can't sell. But it doesn't scale. You spend 10K more to save 2.5K in taxes. Buy because you want to, not to reduce taxes.
"A slower approach: keep any discussion of income out of it to begin with. Remaining within discretionary income Z, just go back to the charities your SO has proposed, and say that you would like to set up monthly donations. You would also like to donate a similar amount to charities of your choice. Say what bills your proposed contribution is less than. Once your SO has got used to the idea of charitable giving as a regular expenditure, and has got back the grateful charity newsletters and whatnot, then address the issue of how much you ""should"" give by comparison with income. Whenever you do consider income, your SO doesn't really seem to want anything to do with this. So I'd approach it as seeking agreement. Eric Lippert has a more long-term approach for seeking involvement. So, present the following information however seems best, probably with a pre-amble establishing that you both want to support charities, so the question is how much and how to get it done. ""We earn U. This means we are fortunate enough to be in the top V% of households. Our income breaks down as: This being the case, we can afford to be generous. I would like us to give to the charities that we each care about, to the extent of N. Charitable giving is important to me because ... The amount I suggest we give is less than what we spend annually on ..., and I chose that amount because ... "" Depending on the tax situation, you may then have to explain how N from gross income translates to an actual amount available to give to charity. Or charitable giving might be tax free. If the N you want is greater than Z-A then it might be wise to suggest a smaller amount, but ask that you both make a plan in increase it in a year or whatever. Similarly if N strikes your SO as a scarily large number then I would think the best thing to do is just reduce it so that at least you start somewhere. If Y is low or zero, and your SO suffers from anxiety about financial security, then increasing Y at the same time might be a good way to offset the fear of N. When stating income you might want to exclude any income from savings/investments. Although legally it's income your SO might see it psychologically as capital gains and hence touching it would endanger your savings/investment/pension returns. Even though it's all fungible."
"BobbyScon's answer really covers this, but perhaps isn't sufficiently explicit.  Reason 1 of the quotation is the largest, by far: Get an Immediate Tax Deduction, but Give Later: You get the tax deduction when the foundation is funded, then make your charitable gifts over time. Having a ""personal"" foundation means that you make donations whenever it is appropriate from a personal finance point of view, but then actually perform the charitable giving in a time that is convenient. So you fund the foundation on Dec. 31, say; that gets the money out of your hands, and out of your taxable income, for the prior tax year.  Then you're not required to do anything else with that money until a time and place where it's convenient to you. In many cases, they set it up not as a foundation but as a Donor Advised Fund.  These are of late becoming extremely popular among the wealthy, largely the ease of setting them up and the above. The other major advantage of a Donor Advised Fund is simplicity in tax season: you have exactly one charitable donation recipient, with one receipt (or one set of them if you donate over time)."
Yes, depending on the timing.  You generally can make a tax-free withdrawal of contributions if you do it before the due date for filing your tax return for the year in which you made them. This means that even if you are under age 59½, the 10% additional tax may not apply. These distributions are explained in Pub. 590-A.  I believe any growth is subject to the 10% penalty: The 10% additional tax on distributions made before you    reach age 59½ does not apply to these tax-free withdrawals of your contributions. However, the distribution of interest or other income must be reported on Form 5329 and, unless the distribution qualifies as an exception to the age 59½ rule, it will be subject to this tax.
You don't get any tax benefit.   When you are helping a relative or a friend in such situations the income is just gone.   The only way to get around this is if you contribute to a charity, and they give it to your mom.  You can then deduct the contributions to that charity.  However, the IRS has cracked down on such situations and it probably is not worth pursuing.  By the recent tax rules, that charity can use those contributions in which every way they choose, they cannot guarantee they go to your mom. Given that you are closed to your allowed exclusion (14K for 2017), I would work to keep your number under that.  If you are married, you each get that exclusion so you can give up to 28K.   I can't really speak to the reduction of benefits part as I am knowledgeable and more details on the type of transfer payments she receives would be germane to the discussion.
It is correct, in general. Gift tax is indeed at 35%, but you have the first 14K of your gift exempt from it for each person you give to, yearly (verify the number, it changes every year). You can also use your lifetime exemption ($5.45M in 2016, subject to change each year), but at the amounts you're talking about it still will not be enough. Charitable (501(c)) organizations, paying for someone's tuition or medical expenses (directly to the providers), political donations, transfer between you and your spouse - these are all exempt from gift tax. If you have 10 millions to give, I'm sure you can afford a $200 consultation with a EA/CPA licensed in your state.
Outside of a tax sheltered IRA or 401(k) type of account your transactions may trigger tax liability.  However, transactions are not taxed immediately at the time of the transaction; and up to a certain limits capital gains can be offset by capital losses which can mitigate your liability at tax time.  Also, remember that dividend receipts are taxable income as well. As others have said, this has nothing to do with whether or not money has been moved out of the account.
Another benefit of holding shares longer was just pointed out in another question: donating appreciated shares to a nonprofit may avoid the capital gains tax on those shares, which is a bigger savings the more those shares have gone up since purchase.
Most of the time, your tax only reduces by the current marginal rate - meaning you would only reduce your tax by 28% to 25% depending on which part of the bracket you're in. However, in the area around 100k, there are cases where reductions will have more of a marginal effect than that.  You'll never reduce it more than 100%, but you can reduce it by 35-40% despite being in the 25% bracket. That is because of certain deductions and credits which phase out beginning around 80k-120k; things like the IRA deduction, the Child Tax Credit, Childcare Tax Credit, and similar.  Since many of them phase out in this range, additional dollars cost you your marginal rate (25%) plus the percentage of the credits or deductions which phase out here, which might bring you up another 10% or so.
You need a lawyer and a tax accountant for a sale like this. They will be able to tell you if the proceeds are taxed as income (most likely) or capital gains and will help you structure the deal. How you spend the proceeds will not make a difference, although if it's a large amount and you plan to donate some to charity, you may be able to save on your total tax liability by creating a donor advised fund. Keep in mind the broker is mostly interested in his commission and not about making the best deal for you. Get an attorney with experience in business sales.
Timing differences would still all come out in the wash. Might reduce it one year but over a few years it's essentially the same. It's becoming harder to create situations where big timing differences can apply. And generally (although not in every case) companies are seeing the bad press associated with not paying taxes and are being relatively less aggressive than in the past.   There's a lot too it but I get annoyed by people saying companies only make donations to avoid tax. I've posted on it before and it's a silly view.
No.  In a marginal tax system, only additional dollars that push you into a higher bracket are taxed at that higher rate.  If you would pay 15% on $73800, then when you earn over $73800, you will still only pay 15% of the $73800, plus 25% of the extra amount over $73800.  As far as a marginal income tax affects things, you cannot decrease your net income by increasing your salary.  (There can be other potential reasons to keep your income down besides income taxes, as asked in this question, but as the answer there suggests, these often aren't great reasons either.) As far as I know, every income tax system that has differing tax rates works this way.  That is, I'm not aware of any country with an income tax system where you can decrease your net earnings by moving into a higher bracket.
The $250K and up are not one homogeneous group. The lower end of this group benefits from normal Schedule A itemized deductions, e.g. mortgage interest, property tax, state income tax, and charitable donations. As you mention, 401(k) ($17k employee contribution limit this year), but also things like the dependent care account ($5k limit) and flexible spending account, limited usually up to $2500 in '14. The 529 deposits are limited to the gifting limit, $14K in 2014, but one can gift up to five years' deposits up front. This isn't a tax deduction, but does pull money out of one's estate and lets it grow tax free similar to a Roth IRA. The savings from such accounts is probably in the $15k - $20K range given the 20 or so year lifetime of the account and limited deposits. At the higher end, the folks making the news are those whose income is all considered capital gains. This applies both to hedge fund managers as well as CEOs whose compensation included large blocks of stock. This isn't a tax deduction, but it's how our system works, the taxation of capital gains vs. ordinary income.
This will always be the case unless the tax relief is more than the expenditure, which it never is. There are some ways in which this can become worth it: if the thing you are spending the money on would actually be useful, of it you might be able to sell it for more than four dollars later - or if you can claim a government grant or similar for more than four dollars. And at the level of corporate finance it can get more complicated. But otherwise, No.
First, the single worst reason to do anything is because most people are doing it. The second worst thing is to take tax advice from a non-tax pro. (Ironic, I understand, but read on) Run through your 2015 tax return. Do you itemize already? If not, there's a reason, the standard deduction for a couple is $12,600 in 2016, so a renter isn't likely to have enough deductions to itemize, even with a high state tax.  For 2016, project your total interest from the mortgage, and the year's property tax, then add your state income tax, and last, any charitable donations. This total comprises the bulk of what people take on their Schedule A. Now, since your current withholding assumes the standard $12,600, subtract this number, and you're left with the amount your taxable income will be reduced for the fact that you have the house. Last, divide this number by $4000. The result is how many more withholding allowances you can claim. One personal exemption (a withholding allowance) is exactly $4050 this year.  For what its worth, median home price for early 2016 was $190K. After 20% down, a $152K mortgage would cost about $6000 in interest the first year, and maybe $3000 in property tax. The average couple, making $60,000 or so won't have a state bill much over $3000, so shy of some nice donations, it's easy to have a house, yet still not itemize.  Of course, if you have higher income and a more expensive home, the numbers will be different.  The best you can do is to get tax software or use an online service and estimate the 2016 return based on your numbers. If you wish to post numbers via an edit to your question, I'm happy to update my answer a bit to your situation.  Note - the form you'll use to adjust withholdings, the W4, offers a worksheet to perform the calculation.  It asks in line 1 for your total itemized deductions, then subtract the standard deduction, then divide by $4050. Pretty much what I suggested above.
In addition to the 10%/7.5% limitation mentioned in the answer by mgkrebbs (which means that very few people can take advantage of the deduction), itemized deductions reduce taxes only when the total of all the itemized deductions exceeds the standard deduction available to the taxpayer. People with mortgaged homes have a leg up on this because they can include the mortgage interest and property taxes on Schedule A whereas those who rent their living space cannot.  In other words, not having sufficient other itemized deductions can make the really ill person with medical bills large enough to exceed the 10% limitation suffer the double whammy of not getting a tax reduction for any part of the huge medical expense.