Are you still trying to finalize your charitable giving for the year? Is it even more confusing when you are not sure how the new tax legislation might impact the deductibility of your gift?
There is no question the new tax legislation will impact how you might treat your charitable gifts this year. For some, the new higher standard deduction will encompass the charitable gifts that may have been taken as itemized deductions in the past.
You still have time to make your charitable gifts for the year and several ways to get this accomplished.
- If you are 70 ½ or older and have an IRA, you may want to consider gifting from your Required Minimum Distribution (RMD). This is still one of the most efficient ways to make charitable gifts outside of itemizing the gift.
- For anyone who may not be able to utilize the 70 ½ RMD gifting rule but makes charitable gifts each year, you may want to consider bunching or bundling multiple years of gifts into one year in order to exceed the standard deduction amount.
- You can also consider giving appreciated assets, like stock or mutual fund shares. This would count toward an itemized deduction and can be utilized with the bundling strategy.
A Donor Advised Fund can be a beneficial option for those bundling multiple years of gifts to exceed the standard deduction. This simple, tax-smart investment solution for charitable giving can be funded with cash or appreciated assets including stocks, ETFs, and/or mutual funds. You are eligible for a current-year tax deduction, but gifts are not required to be made immediately. This means you can be more strategic about your giving decisions in future years while taking advantage of potential tax benefits now.
We have assisted many of our clients with opening Donor Advised Funds at Charles Schwab or the Columbus Foundation.
Smarter Charitable Giving
Relying on a charity’s own website and fundraising materials may not be the best way to determine whether or not they are using your gifts wisely. We recommend the following resources to assist you in better evaluating charities: