The Countdown is On:
Tips for Year-End Charitable Giving
It’s that time of year again, when many people add charitable giving to their busy to-do list!
Year-end giving can come with great benefits and now is a good time to make the most of it:
Consider Your Income and Talk to a Professional
Take time to understand your tax liability for the year and whether you plan to itemize your deductions or claim a standard deduction. This can help you determine how much you want to give by December 31. It is always prudent before making any significant charitable gifts to consult with an advisor to discuss the impact on your taxes and estate.
Know the Organizations You Support
Learning more about the nonprofits will help you feel confident that you are choosing effective organizations—and that your support is really making a difference. Check with the IRS and Better Business Bureau to see if any complaints were filed for an organization. You may also look up ratings for an organization's performance on Charity Navigator. Only deductions to qualified 501(c)(3) organizations are tax-deductible.
If you plan to send donations via check, make sure to mail them early enough—a postmarked date of December 31 secures the gift to count for that tax year, even if not cashed until the following year. Credit card gifts are considered complete when your account is charged. If you choose to donate stock, the transaction is only recognized once the transfer request has been submitted by your financial advisor. The deadline for gifts of stock to the Jewish Foundation is December 29.
Review Your Stock Portfolio
Consider giving long-term (held for more than one year) appreciated non-cash assets, such as stocks, bonds, and mutual funds. By utilizing this strategy, you’ll receive a charitable deduction for the current market value of the stock and eliminate capital gains tax, which may increase the amount available for charity by up to 20 percent.
Utilize Your IRA and Required Minimum Distribution
If you are over 70½, you can make a donation directly from an individual retirement account to a charity. An IRA transfer generates neither taxable income nor a tax deduction, so you’ll benefit even if you don’t itemize your deductions. Beginning in the year you turn 72, you can use your gift to satisfy all or part of your required minimum distribution.
Let Us Do the Work for You: Add to or Establish a Philanthropic Fund
A Donor Advised Fund offers you an effective means to manage your charitable giving and involve your family in philanthropy. You’ll receive a charitable deduction for gifts to your fund in the tax year in which they're made, and you can defer grant making recommendations to any time of your choosing. All contributions are invested according to your risk tolerance, allowing them to grow over time, tax-free. It also makes record keeping a breeze and eliminates the burden of saving tax receipts.
*This article is for informational purposes only and should not be considered financial advice. Please consult with your own legal and tax advisors prior to making charitable giving decisions.
Let us help you create an end-of-year giving strategy that will maximize both your philanthropy impact and your tax savings!
Contact Kellie Smith, Foundation Director, today, to discuss your options: (904) 512-3796 | KellieK@jewishjacksonville.org.