Wondering if you are best prepared for the upcoming giving season?
The holidays will be here before you know it, and to minimize stress and maximize your gifting abilities, it is important to keep in mind a few details that you may or may not be aware of.
If you are not sure how your finances match up with your year-end giving strategy, now is the time to prepare yourself by making your lists and checking them twice. Organization is key to properly giving this holiday season. Follow the five tips below to maximize your charitable giving strategy this year.
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 are interested in offering donations to.
The organization you are involved with should also provide registration information, including 501(c)(3) status and tax identification number. You may also use the tax-exempt organization search tool available on the IRS website to obtain more specific information about the organization.
Bundle Your Donations
As deductions have increased over the years, you may choose to save money over time and donate every few years as opposed to consecutively each year. By doing this, you may receive your itemized deductions over the limit one year and take the standard deduction the next.
If you are interested in accomplishing this, you might consider a donor-advised fund, which allows you to make a charitable donation and immediately receive a tax break. You will then receive recommended grants from the fund to your preferred charities over time.
Donate Appreciated Stock
By donating stocks or other appreciated assets, such as artwork or antiques, you might reduce capital gains taxes on investments.1
High-income earners might consider a non-cash donation specifically because of the tax advantages they may be awarded. Even those who have what they might consider small holdings could benefit by donating appreciated investments this holiday season.
Utilize Your IRA
If you are 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. Also, there is no need to itemize your deductions to benefit.
You may distribute up to $100,000 per year, per taxpayer. This increases to an acceptable $200,000 for married couples if they both have IRAs.2 Although this strategy has existed for some time, it only recently became a part of the permanent tax code.
Monitor and Evaluate Your Portfolio
No matter the size of your seasonal contributions, it is always important to keep up with your portfolio to give properly and confidently. Staying up to date on newsletters, annual reports and CEO updates can be a crucial factor when it comes to understanding the operations of various organizations.
It is important to set personal reminders, at least annually, to re-evaluate your financial and personal priorities and update them if necessary. 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 essential, and maintaining a thoughtful attitude is what makes the holidays meaningful.
If you have questions about year-end giving or what might be the most efficient strategy, contact your Patriot advisor.
This content is developed from sources believed to be providing 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.