Making a gift using appreciated stock generally offers donors two kinds of tax savings:

  1. Because Jewish Federation & Foundation of Northeast Florida is a charitable organization, making a stock gift allows donors to avoid paying any capital gains tax on the increase in the value of the stock that is transferred.
  2. Donors may receive an income tax charitable deduction for the full fair market value of the stock at the time of the gift.

How It Works

  1. You transfer appreciated stocks, bonds, or mutual fund shares you have owned for more than one year to Jewish Foundation.
  2. Jewish Foundation sells your securities and can give the funds to an organization or start a Donor Advised fund to fuel your giving for the future!

 

Benefits

  1. You receive an immediate income tax deduction for the fair market value of the securities on the date of transfer (even if you originally paid much less for them).
  2. You pay no capital gains tax on the transfer when the stock is sold.

Giving appreciated stock can be more beneficial than giving cash. The "cost" of your gift is often less than the deduction you gain by making it.

*Securities must be owned for more than one year to qualify for these significant tax advantages. A stockbroker or trust officer can arrange to transfer a gift of stock from a donor’s account to Jewish Federation & Foundation.

Call Kellie Smith to start the process today! 904-512-3796 or email KellieK@jewishjacksonville.org

*Note: This is for informational purposes only and should not be construed as legal, tax, or financial advice. When considering gift planning strategies, you should always consult with your own legal and tax advisors.

 

 

 

 

MAXIMIZE GIVING WITH STOCK

Making a gift of appreciated stock generally offers donors two kinds of tax savings

  1. Because the Jewish Federation & Foundation of Northeast Florida is a charitable organization, making a stock gift allows donors to avoid paying any capital gains tax on the increase in the value of the stock that is transferred.
  2. Donors may receive an income tax charitable deduction for the full fair market value of the stock at the time of the gift.

 

How It Works

  1. You transfer appreciated stocks, bonds, or mutual fund shares you have owned for more than one year to Jewish Foundation.
  2. Jewish Foundation sells your securities and can give the funds to an organization or start a Charitable Giving Fund to fuel your giving for the future!

 

Benefits

  1. You receive an immediate income tax deduction for the fair market value of the securities on the date of transfer (even if you originally paid much less for them).
  2. You pay no capital gains tax on the transfer when the stock is sold.

Giving appreciated stock can be more beneficial than giving cash. The "cost" of your gift is often less than the deduction you gain by making it.

*Securities must be owned for more than one year to qualify for these significant tax advantages. A stockbroker or trust officer can arrange to transfer a gift of stock from a donor’s account to Jewish Federation & Foundation.

 

Timely Tips for End-of-Year Tax Planning

 

Each year, the IRS offers tips on preparing for filing tax returns in the upcoming filing season. With less than one month left this year, it is an excellent time to gather your tax records and review your withholding and estimated tax payments.

 

·   Withholding – If you are employed, it may be time to update your IRS Form W-4, Employee's Withholding Allowance Certificate. If your income has increased, you can increase withholding this month. There is no timing test for withholding – you can increase withholding in November and December to get in compliance. The IRS Tax Withholding Estimator on IRS.gov may be helpful.

 

· Estimated Tax Payments – If you have self-employment income, investment income and some types of retirement income, you may need to make quarterly estimated tax payments. A new type of income that may require larger estimated tax payments is virtual currency. If you receive virtual currency payments for goods or services, you may need to make estimated tax payments. Publication 505, Tax Withholding and Estimated Tax may be helpful if you have a complicated tax situation.

 

· Gather Documents – You should have an electronic or paper system for gathering all your necessary tax information. You should have copies of prior year tax returns, Forms W-2 from your employers, Forms 1099 from banks and financial service companies and records for virtual currency transactions. If you have moved, you should be certain your employer, bank, financial service company or other payer has your current address. If they send the tax forms to your old address, your return filing process could be delayed.

 

· Tax ID Numbers – Some taxpayers without a Social Security Number have an Individual Tax Identification Number (ITIN). If your ITIN has expired, use IRS Form W-7 to renew it. If you delay in renewing your ITIN, your refund may be delayed.

 

· Electronic Filing – Most taxpayers have embraced the convenience and accuracy of electronic filing. If your income is below $72,000, you may use the IRS Free File software. All taxpayers can use the fillable forms. You can expedite your refund with direct deposit to your bank account.

Starting early is always a good practice. By adjusting your withholding or estimated tax payments and preparing to gather your records, you can have a good filing season next year.
 

IRA and 401(k) Contributions in 2021

On October 26, 2020, the IRS announced the 401(k) and IRA contribution limits for 2021. The IRA limit remains at $6,000 in 2021. Individuals over age 50 may make a catch-up contribution of $1,000, for a total transfer of $7,000 in 2021.

Traditional IRA contributions from earned income are tax deductible. The traditional IRA has two main tax benefits – contributions are tax deductible and grow tax free. If you are covered by a qualified retirement plan at your workplace, the IRA deduction may be reduced or phased out.
 

1.     Single Taxpayers with Workplace Plan – IRA contributions for single taxpayers are phased out for persons with incomes from $66,000 to $76,000.

2.     Married Couple with Workplace Plans – A couple with joint income of $105,000 to $125,000 will experience the IRA phaseout.

3.     Married and No Workplace Plan – If one person has no workplace plan and the spouse is covered in his or her workplace, the phaseout on a joint return is $198,000 to $208,000.

A Roth IRA is funded with after-tax income. It grows tax free and most distributions are tax free. After the Roth IRA has been in existence for five years and the owner is over age 59½, amounts may be withdrawn tax free.

The Roth IRA phaseout limits also increase in 2021.
 

1.     Single Individuals – The Roth IRA phaseout for single persons next year will be $125,000 to $140,000.

2.     Married Couples – For married couples, the Roth IRA phaseout is $198,000 to $208,000.

Many businesses maintain a 401(k) plan and most nonprofits provide a 403(b) plan. The 2021 limit for an employee contribution to a 401(k) or 403(b) plan remains $19,500. Employees over age 50 may make a catch-up addition of $6,500, for a total transfer limit of $26,000.

If your employer offers both a traditional 401(k) and a Roth 401(k) plan, you may allocate your employee contribution to one or both funds. The traditional 401(k) amounts are deductible, but the Roth 401(k) contributions are after-tax.

Editor's Note: Many employers match the employee 401(k) contributions. This is a good way to encourage employee participation in the 401(k) plan. The employer match is used to fund the employee's traditional 401(k) account. The employee may still make contributions to a Roth 401(k) account up to the $19,500 or $26,000 limit.

 

Call Kellie Smith to start the process today! 904-512-3796 or email KellieK@jewishjacksonville.org

 

*The Jewish Federation & Foundation of Northeast Florida advises you to consult your Tax professional and or Financial Planner to discuss what works best for you and your family!