gross income

Money deposited into those accounts is subtracted from your gross income for the year, reducing your tax bill or increasing your refund.

For example, “If a married couple has a modified adjusted gross income of $250,000 and they buy a $50,000 piece of equipment for their business, that brings their income to $200,000 after the 100% depreciation. Now they may be eligible for other tax benefits,” says Brian Schultz, a tax partner at Plante Moran.

Because donations to a DAF can usually be deducted up to 30% of adjusted gross income, this stock gift provides a dollar-for-dollar deduction and significantly lowers their taxable income.

First, the tax bill sets a new floor: Gifts will be deductible to the extent they exceed 0.5% of your adjusted gross income.

The full deduction goes to taxpayers with $75,000 or less in modified adjusted gross income, or $150,000 for married couples.