Smart ways to do your End-Of-Year Giving
A lot of people are thinking about their end-of-year giving and if that's you, we want you to have the info needed to give well, especially if you're giving stock, utilizing Donor Advised Funds (DAFs), or making a Qualified Charitable Distribution (QCDs). These are all effective ways to support charitable causes while potentially providing you with tax benefits. Here's how to do each of these and why they may be a good idea this year.
1. Why it's a good idea to give stock this year: If you hold highly appreciated stocks or other securities, donating them can help limit your tax liability.
How to give stock:
Select a charity like Idaho Partners for Good: First, choose the charitable organization you wish to support. We get greater impact for every donation invested.
Contact the Charity: Contact the chosen charity to ensure they can accept stock donations and to get the necessary information, like their brokerage account details. If you want to give to IP4G just email info@IdahoPartners4Good.org and we can supply the required information.
Transfer the Stock: Initiate a transfer of the stock from your brokerage account to the charity's account. This can usually be done electronically.
Tax Benefits: You'll receive a tax deduction for the fair market value of the donated stock. You won't pay capital gains tax on the appreciated value.
2. Why it's a good idea to give from your Donor Advised Funds (DAFs): DAFs allow you to take a tax deduction when you contribute to the fund, potentially offsetting other income. If you've made a lot of money this year, this method can help. How to give from your Donor Advised Fund investments:
Fund Contributions: Contribute to your DAF by transferring assets (cash, stocks, etc.) into the account. You can receive a tax deduction.
Recommend Grants: Once the assets are in the DAF, you can recommend grants to qualified charitable organizations. Many of our donors currently use this approach to support Idaho Partners for Good. Your DAF sponsor will typically process these grants for you.
3. Giving from Qualified Charitable Distributions (QCDs) and Its Benefits: For our supporters over 70½ or older QCDs are especially advantageous because they allow you to fulfill your required minimum distributions (RMDs) from retirement accounts while avoiding taxable income.
How to give from your Qualified Charitable Distribution:
Qualification: You must be at least 70½ years old and have a traditional IRA.
Distribution: Instruct your IRA custodian to make a direct transfer from your IRA to the charity of your choice to satisfy the RMD distribution requirement for the year.
Limits: QCDs are limited to $100,000 per taxpayer per year. They are not tax-deductible but are excluded from your taxable income.
Before making any charitable contributions, consult with a tax advisor or financial professional to understand how these strategies might impact your personal financial situation and to ensure you maximize the potential tax benefits. Laws and regulations can change, so it's essential to stay informed about the latest rules regarding charitable giving.
BTW – we have trusted, qualified wealth managers who can help you, if you need it.
Disclaimer:
The information provided is for general informational purposes only and is not financial advice. Idaho Partners for Good is not a licensed financial advisor. Before making any financial decisions, consult with a qualified professional. Idaho Partners for Good is not responsible for any actions taken based on the information provided.