Hi, this is my first time posting.
I want to start donating 10% of my income to charity. However, this would be about $10,000 a year—i.e. just under the standard deduction, such that none of it would be tax deductible. This seems ridiculously inefficient. I could be somewhat more efficient by clumping my donations—e.g. donate $30,000 per 3 years, and get $18,000 of it tax exempt. But I want to do better.
My dad itemizes his taxes and is in a higher tax bracket than me (50% income tax). If he were to donate $20,000, he’d get $10,000 back on his tax return. So if I gave my dad $10,000 and he donated it, my donation would be literally twice as impactful as if I did it myself.
The question is, are there any legal issues with this?
Giving the money to my dad: I know that the gift exemption is $15,000, so I could give my dad up to that without either of us noting it on our taxes. I do want him to do something in particular with the money—is there any way that could cause it to not be considered a gift? It seems like in practice, many things things that would fall under the gift exemption do come with expectations (e.g. a parent giving their child money they intend the child to use for rent).
My dad writing the donation off: Would there be anything preventing my dad from writing the donation on his taxes? There’s something about how if you make a charity donation, you’re not supposed to write it off if you receive or expect to receive a benefit from it. I’m not sure if this means “from the charity” or “from anyone” though. (It’s also unclear my dad would be receiving any benefit, because this is dollar-neutral for him). Another example that this can’t too literal—I imagine some EA might want to take their new EA friends out for dinner to celebrate them starting the Giving What We Can pledge—that seems like it shouldn’t negatively affect anyone’s taxes.
What if my friends also want to maximize their donations by routing them through my dad? Is anything different because they aren’t family members doing the giving? No one involved would be writing any legal contracts or anything.
Thanks in advance for any advice! I know taxes are boring for everyone, but I don’t want to miss the opportunity to make my donations more effective.