Giving Season is Upon Us | Advice from Our Financial Advisors to Maximize Your Year-End Giving Strategy
The holidays are here! To reduce stress and get the most out of this gifting season, it is key to keep in mind a few things when it comes to making donations.
You may not know if your finances and year-end gifting strategy align with each other. Now is the perfect time to prepare by making your lists and checking them twice. Staying organized is key to maximizing your gifting this holiday season. Follow the five tips below to make the most out of your charitable giving strategy this year.
1. Do Your Research
By using sites such as Guidestar or the Better Business Bureau’s Wise Giving Alliance, you can learn more about the groups you’re interested in donating to.
The organizations you’re involved with should also be able to provide registration information, including 501(c)(3) status and tax identification numbers. You may also use the tax-exempt organization search tool available on the IRS website to obtain more specific information about such organizations. Check out the link below for more important information from our financial advisors on year-end giving.
2. Bundle Your Donations
As deductions have increased over the years, you could choose to save money overtime and donate every few years instead of consecutively each year. By doing this, you may receive itemized deductions that go over the limit of one year and take the standard deduction the next.
If this type of giving interests you, you might consider a donor-advised fund that allows you to make a charitable donation and immediately receive a tax break. Then, your preferred charities will receive grants from the fund over time.1
3. Donate Appreciated Stock
By donating stocks or other appreciated assets, such as artwork or antiques, you might reduce capital gains taxes on investments.2
High-income earners specifically might consider a non-cash donation because of the potential tax advantages they could be awarded. Even those who have what they might consider small holdings could benefit by donating appreciated investments this holiday season.
4. Utilize Your IRA
If you’re a retiree over the age of 70½, you might consider transferring money from your IRA to a qualifying charity. These distributions can be a tax-efficient way of meeting any required minimum distribution. Additionally, there’s no need to itemize your deductions to benefit.
Each taxpayer may distribute up to $100,000 annually. This increases to an acceptable $200,000 for married couples if they both have IRAs.3 Although this strategy has existed for some time, it has only recently become a part of the permanent tax code.
5. Monitor and Evaluate Your Portfolio
No matter the size of your seasonal contributions, it’s always important to keep up-to-date knowledge on your portfolio to give properly and confidently. Staying informed through newsletters, annual reports, and CEO updates can be an important factor when it comes to understanding the operations of various organizations.
It’s important to set up personal reminders, at least annually, to assess your financial and personal priorities and update them, if needed. Your interests and priorities are bound to change over time, and so will the causes you choose to support. Being aware of these fluctuations is key, and maintaining a thoughtful attitude is what makes the holidays meaningful. If you need help evaluating your financial priorities and deciphering what you’re able to donate, talk to an advisor today!
- https://www.investopedia.com/terms/d/donoradvisedfund.asp
- https://www.irs.gov/publications/p526
- https://www.irs.gov/newsroom/reminder-to-ira-owners-age-70-and-a-half-or-over-qualified-charitable-distributions-are-great-options-for-making-tax-free-gifts-to-charity
This content is developed from sources believed to provide accurate information and provided by Twenty Over Ten. It may not be used for the purpose of avoiding any federal tax penalties. Please consult legal or tax professionals for specific information regarding your individual situation. The opinions expressed and material provided are for general information and should not be considered a solicitation for the purchase or sale of any security.