By Joy Taylor
From Kiplinger’s Personal Finance
Question: Can I deduct charitable contributions that I made in 2022 if I don’t itemize?
Answer: No. The 2020 and 2021 easing for charitable gifts of cash has expired.
Beginning with 2022 returns filed next year, nonitemizers can no longer write off on page 1 of the Form 1040 up to $300/$600 in cash donations paid to charity.
Question: My wife and I want to max out donations from our IRAs to charity this year. What is the maximum qualified charitable distribution (QCD) we can make?
Answer: The maximum is $100,000 per IRA owner. People 70 1/2 and older can transfer up to $100,000 each year from traditional IRAs directly to charity. QCDs can count as all or part of your required minimum distributions, but they aren’t taxable and they aren’t added to adjusted gross income.
Of course, you can’t deduct the donation on Schedule A. Because you are married, you and your spouse can each potentially give up to $100,000 from your separate IRAs, making the maximum QCD $200,000, provided each of you has substantial amounts in your IRAs. But let’s say you have a $70,000 balance in your IRA, and your wife has an IRA worth $1.2 million. In this situation, your QCD cap is limited to $70,000, and your wife’s is limited to $100,000. Your wife won’t be able to make a QCD of $130,000 to make up for the deficit.
Question: I plan to lease an electric vehicle next year. Will I get a tax credit?
Answer: Unfortunately, no. The newly named clean vehicle credit of up to $7,500 applies to EVs that are acquired by the taxpayer, meaning title to the vehicle changes hands. But all may not be lost. The tax credit goes to the manufacturer or the dealer for leased EVs, so there’s no harm in requesting that the dealer reduce the price of the leased vehicle by all or part of the dealer’s credit amount.
Question: Does the wash-sale rule apply between spouses?
Answer: Yes. The wash-sale rule prohibits you from taking a capital loss write-off on the sale of securities if you purchase substantially identical securities up to 30 days before or after that sale. Any disallowed loss is then added to the tax basis of the replacement securities.
You also have a wash sale if you sell securities, and your spouse or a corporation that you control buys substantially identical securities within the 60-day period.
(Joy Taylor is editor of The Kiplinger Tax Letter. For more on this and similar money topics, visit Kiplinger.com.)
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