On today’s Money on Your Mind series, we are answering the question, “When is a tax deduction worth it?” This is a very common question I hear from clients who are wondering when and how much should they donate to receive deductions. Personally I would say this. If you are only going to save a couple thousand dollars but have to take tens of thousands and of dollars out of yours savings or portfolio, is it worth it?
You need to ask yourself …
1. Are you planning expenses in the near future?
2. What do you need to live off of?
3. Are you putting to much into a bucket that you’ll have to pay more on over time?
Look at all the scenarios and work with your tax accountant and your financial planner together to make the decisions. If you put too much into the tax deferred bucket you might have to pay more taxes later in life. Think about it from a whole picture standpoint. Ask questions!
Disclaimer: We will not be delivering direct advice to your financial situations. These segments will be made available as educational resources for you to take back to your personal board of directors – financial planner/advisor, accountant/tax preparer, and/or attorney.
