Posts Tagged ‘taxes’

To Save on Taxes, Make Charitable Gifts Before Year’s End

Monday, December 9th, 2013


If one wishes to make charitable gifts as part of a tax-saving strategy, now is the time.

Although tax returns are not due until April 15, December is an excellent time to do a “dry run” on one’s tax return, to get an estimate of what one expects to pay in taxes, and to determine what charitable giving one may want to do before the end of the year, in order to reduce taxable income and lower one’s tax bill.

Newly retired individuals may benefit especially from such a dry run on their tax returns, as retirees are often unclear on how to manage taxes in retirement. If there are problems with withholding on pensions, Social Security or IRA withdrawals, then one may end up paying penalties and interest at tax time. IRA account owners can make use of a key strategy to deal with any underpaid taxes. It is possible for IRA owners to make a distribution and withhold the whole sum for taxes. The IRS will not consider it a late payment, but will treat it as taxes paid throughout the year.

Another IRA strategy for retirees is charitable IRA rollovers. After age 70 1/2, owners of traditional IRA accounts must begin taking required minimum distributions. However, they can make direct transfers of up to $100,000 from an IRA to qualified charities, and this counts toward the required minimum distribution, while not being counted as income.

Anyone wishing to make charitable contributions before the end of the year needs to be aware of the rules for timing different types of gifts so that they count for the current year. One may also wish to make gifts to friends and family members before the end of the year without triggering a gift tax. The limit is $14,000 for individual givers and $28,000 for married couples – to as many individuals as they wish.

When donating to a charity by check, the effective date of the donation is the date the check was mailed. When giving to non-charity donees, the gift is effective when the check clears.

Giving stock to a charity by certificate form is effective on the date of transfer in the records of the issuer.

Giving stock to a charity by electronic transfer is effective on the date the issuer shows that the stock is received, which can take several days. For non-charity donees, the gift is effective when the transfer is made on the books of the corporation, which can take weeks.

Spend Time in Two States? Get Informed on the Laws

Wednesday, December 5th, 2012

Research can help avoid unwelcome surprises for you or your family

(as seen  in the Poughkeepsie Journal by guest columnist Bernard A. Krooks, Esq., Littman Krooks LLP)

We live in a mobile society, where it’s common to spend significant time away from home visiting the grand kids or escaping winter weather. New Yorkers comprise the single largest segment of Florida’s temporary residents, with many ultimately relocating on a permanent basis. But those address changes could complicate your estate planning, long-term-care arrangements and tax bill.

In general, if you spend183 days per year in a state, its residency laws kick in, so it’s important to keep track of calendar days. And if you decide to move permanently, you should check that the legal documents framed in one state will be recognized elsewhere.

Estate planning

The regulations governing trusts and advance directives vary throughout the country. Even a difference in the number of witnesses required to acknowledge a document can render it void. Doctors and hospitals have been
known to disregard the instructions contained in living wills and healthcare proxies that were drafted in another state. Banks could ignore directives from your designated financial agent. And it could be devastating to
the financial security of loved ones to discover that a relocation has rendered your prior planning invalid. If you have important ties to more than one state, be sure your estate planning documents explicitly describe
the situation. It’s also useful to consult legal counsel from the relevant jurisdictions. That ensures that advantageous differences in state law are considered, and it’s less likely that recent legislation will be overlooked.

Long-term care
Since Medicaid is often a major source of funding for long-term care, differing state guidelines could complicate a sudden, debilitating medical condition. Eligibility requirements, as well as covered services, often vary. In a
previous column, I discussed “filial responsibility” laws, which could potentially hold adult children responsible for their parents’ expenses. These are state-specific and evolving, so lapses in Medicaid coverage have the potential to result in big bills for the younger generation. Work through the scenarios with certified elder-law attorneys who can navigate the Medicaid systems of whichever states you or your parents are likely to call home in later years.


Another possibility is that more than one state will hold you liable for income or inheritance taxes. Residency audits are increasingly common, and New York is especially aggressive, with taxpayers expected to provide documentation that establishes where they’re spending their time. Nor is that the sole determinant. You must take active steps to relinquish New York residency— possibly including the sale of real estate —in order to establish another domicile. For many couples, second homes and frequent travel represent a lifetime’s hard work and investment. With some forethought, you can ensure that your chosen lifestyle doesn’t have costly, unintended consequences.

Bernard A. Krooks, Esq.,  is managing partner of the law firm Littman Krooks LLP (; 845-896-1106), with offices in Fishkill, White Plains and Manhattan. His firm collaborates with Solkoff Legal, P.A., Delray Beach, Fla., on dual residency issues.

To see the complete article, click here. For more information about the Littman Krooks and Solkoff Legal Alliance, click here.