Great question! Your 2022 values are actually still pretty solid for 2025 filing. I've been doing my own donations for years and those numbers align well with current thrift store prices. One thing I'd add that hasn't been mentioned - if you're using software like TurboTax or FreeTaxUSA, they often have built-in donation value guides that get updated annually. These can be helpful for cross-referencing your values. Also, don't forget about accessories! Belts ($3-5), purses ($8-15), and ties ($4-8) can add up if you donated any. And if you donated any designer items or higher-end pieces, you might be able to justify higher values as long as they were in good condition. The key is being reasonable and consistent. Your list shows you're being thoughtful about this rather than just making up numbers, which is exactly what the IRS wants to see.

One thing to keep in mind is that the IRS has gotten stricter about non-cash charitable deductions in recent years, especially after seeing inflated valuations. Your values from 2022 are actually quite reasonable and conservative, which is good. I'd suggest sticking with those values or even being slightly more conservative. The difference between claiming $10 vs $12 for jeans isn't worth the potential audit risk. What matters most is that you can demonstrate you used a consistent, reasonable method for valuation. Also, make sure you're only claiming items that were actually in "good used condition or better." The IRS specifically states that items with significant wear, stains, or damage don't qualify for deductions at all. When in doubt, it's better to exclude questionable items rather than risk having your entire donation questioned during an audit. Document everything well - keep that Goodwill receipt, maintain your itemized list, and if possible, take photos before donating. The goal is to show you made a good faith effort to determine fair market value using reasonable methods.

One thing that caught me off guard when I had a big gambling win last year was the backup withholding situation. If you don't provide your SSN to the casino or if there are issues with your tax ID, they'll withhold 24% for backup withholding on top of the regular withholding. This happened to me when I forgot my ID at a casino and they couldn't verify my SSN immediately. Also, for anyone dealing with multiple gambling venues, make sure you're keeping track of all your W-2G forms. I had winnings from three different casinos and two online poker sites, and it was a nightmare trying to reconcile everything at tax time. Each venue reports to the IRS separately, so you need to make sure you're accounting for all of them on your return. The IRS matches these forms to your tax return, so missing even one can trigger an audit or at least some unpleasant correspondence. I learned this the hard way when I missed a $1,800 win from a smaller casino and got a notice months later.

Just wanted to add something that might help with the confusion about withholding vs. final tax liability. I work in casino operations and see this misunderstanding all the time. The key thing to remember is that gambling winnings are treated exactly like a bonus from your employer. When you get a work bonus, your employer withholds taxes at a flat rate (usually 22% for bonuses), but your actual tax rate depends on your total income for the year. Same principle applies to gambling. So if you win $800,000 like in your example, the casino withholds 24% ($192,000), but when you file your taxes, that $800,000 gets added to whatever other income you had. If your total income puts you in the 37% bracket, you'll owe 37% on the portion that falls in that bracket - meaning you could owe significantly more than what was withheld. This is why it's crucial to set aside additional money beyond what's withheld, especially for large wins. I've seen too many people spend their winnings thinking the 24% withholding covered their full tax obligation, only to get hit with a massive bill later.

Great question about guaranteed payments for capital vs. services! You're absolutely right that they're treated differently for self-employment tax purposes. Guaranteed payments for services are subject to self-employment tax, but guaranteed payments for the use of capital (like a guaranteed return on a partner's capital contribution) are NOT subject to self-employment tax. The key distinction is whether the payment is compensation for personal services performed for the partnership or a return on capital invested. For example, if a partner receives guaranteed payments because they're the managing partner performing services, that's subject to SE tax. But if they receive guaranteed payments simply because they contributed more capital to the partnership and are guaranteed a fixed return, that's not subject to SE tax. However, both types still get the same M-1 adjustment treatment on the 1065 - they're both added back because they're deducted for book purposes but not for calculating distributive shares. The SE tax difference only matters on the individual partner's return when they're calculating their self-employment tax liability. Make sure your partnership agreement clearly specifies the nature of any guaranteed payments to avoid confusion during filing.

This has been such a helpful thread! I'm in a similar situation with our LLC partnership and had no idea about the distinction between guaranteed payments for services vs. capital. One thing I'd add from our experience - when we first started making guaranteed payments, our bookkeeper was treating them as regular business expenses in QuickBooks, which made the M-1 reconciliation even more confusing. We had to go back and reclassify them as partner distributions/draws to get our books to match what the tax software expected. Also, for anyone using tax software, make sure you're entering guaranteed payments in the right section. We were initially putting them in the wrong place and the software wasn't automatically generating the M-1 adjustment. Once we moved them to the proper guaranteed payments section, everything reconciled correctly. The key insight from this discussion is that guaranteed payments create this "bridge" issue between book accounting (where they reduce income) and tax accounting (where they don't reduce the partnership's taxable income for distribution purposes). Understanding that concept made everything else click into place for me.

One strategy I haven't seen mentioned yet is checking if your employer offers any Employee Assistance Programs (EAP) that might include financial counseling services. Many companies provide free access to financial advisors through their EAP who specialize in exactly these kinds of retirement account decisions. I used my company's EAP when I was facing a similar situation with my 401k, and the advisor was able to walk through all the scenarios with actual numbers based on my specific tax situation. They even had software that could model different withdrawal amounts and timing to show me exactly what my tax liability would be under various scenarios. Since you're already dealing with the stress of medical bills, having a professional help you crunch all these numbers - especially with the complexity of ESOP rules, state taxes, and potential impacts on other benefits - could be worth its weight in gold. And if it's through your EAP, it's typically free and confidential. Also, some EAPs have relationships with medical bill advocates who can help negotiate with healthcare providers on your behalf, which could work alongside the provider negotiation strategy that Dylan mentioned. Might be worth checking what resources your employer offers before you make any final decisions on the withdrawal amount.

I went through something very similar with my company's ESOP last year and wanted to share a few things that really helped me navigate the process more effectively. First, I'd strongly recommend getting a complete copy of your ESOP plan document (not just the summary), as many plans have specific provisions for medical hardships that aren't well-publicized. My plan actually had a tiered hardship system where certain medical emergencies qualified for reduced penalties beyond just the standard IRS exceptions. Second, timing is absolutely crucial. I ended up splitting my withdrawal across two tax years (December and January) which kept me from jumping into a higher bracket. But here's something most people miss - if you're going to do this, make sure you have qualifying medical expenses in both tax years to maintain the penalty exception for each distribution. One thing that saved me thousands was discovering that my state (Ohio) actually has a more generous medical expense threshold than the federal 7.5% AGI requirement. Some states use different calculations or have additional exceptions, so definitely research your state's specific rules. Finally, don't overlook the administrative side. Make sure you understand exactly when taxes will be withheld versus when they're due. My plan automatically withheld 20% for federal taxes, but I still needed to make estimated quarterly payments because the withholding wasn't enough to cover my actual liability. The whole process was stressful, but taking time to understand all the rules upfront saved me from making costly mistakes. Happy to share more details if anyone has specific questions about the process.

Has anyone actually done this successfully? I started something similar last year and ended up with a donor-advised fund instead because the legal and compliance requirements for a private foundation were too intense. The annual reporting alone was going to cost me thousands in accounting fees.

I've been through this exact process and can share some practical insights. You're right that this sounds like a private foundation structure, and yes, it's absolutely doable with proper planning. A few key things I learned during my setup: 1. The "sole member" aspect is perfectly legal, but you'll still need independent directors on your board to satisfy IRS requirements. I structured mine with me as the sole voting member, but with 3 independent directors who handle day-to-day operations and conflict of interest oversight. 2. For the investment growth strategy - this works, but be very careful about the types of investments you choose. The "jeopardizing investments" rules are stricter than most people realize. Stick to conservative, diversified portfolios initially. 3. Your 5% annual distribution plan is solid, but make sure you're calculating it correctly. It's based on the fair market value of your non-charitable use assets, averaged over the prior 3 years. The IRS has specific rules about what counts toward this requirement. 4. Documentation is crucial. Keep detailed records showing that all decisions benefit the charitable purpose, not personal interests. The IRS will scrutinize transactions between you and the foundation very closely. One unexpected benefit: having this structure has actually made my charitable giving more strategic and impactful. The multi-year planning horizon lets you tackle bigger projects than you could with annual donations. Happy to answer specific questions about the setup process if helpful.