Three strategies to help you amplify charitable giving as the tax year winds down.
At Financial Harvest Wealth Advisors, we are blessed to serve charitably inclined clients who give regularly. Our smart and generous clients want to be sure they are maximizing their tax savings through their approach to giving.
Amplify Charitable Giving by Giving Appreciated Assets
At Financial Harvest, we like to say, “Friends don’t let friends give cash to charity.”
Instead of giving cash to a charity, we suggest you consider giving stock. For example, presume you bought Amazon stock for $1,000, and now that stock is worth $5,000. If you give the $5,000 in stock to the charity, instead of giving cash, you will be able to deduct the $5,000 charitable gift, as opposed to only deducting the $1000 you initially paid for the stock. And, of course, tax deductibility is always contingent on factors such as the tax status of the recipient (for example: is the organization recognized by the IRS as a 501(c)(3)) and whether you are itemizing your deductions.
Additionally, since you incurred capital gains through the stock price growth, you can also mitigate your taxes by not triggering any of those capital gains when you give that stock to charity.
Amplify Charitable Giving by Making Gifts to Donor-Advised Funds
Using a donor-advised fund (DAF) can effectively vary the size of your gift/tax deduction. For example, you might make a larger gift, which generates a larger deduction, in a year when you know your income will be higher. This tool also allows you to set aside appreciated assets for gifting in the future when you identify the causes you want to support. The deduction you receive is applied to the year you give the appreciated assets to the donor-advised fund.
Qualified Charitable Distributions
Once you are in your retirement years, age 70 ½, you can take advantage of another strategic way to give, using a Qualified Charitable Distribution (QCD). Even if you’re not itemizing your deductions, giving all or a portion of your required minimum distribution (RMD) to a qualified charity saves taxes as distributions because QCDs are not included in your Adjusted Gross Income (AGI). In addition, since QCDs reduce your AGI, they can also help you avoid paying higher Medicare B premiums.
If you are already our client, we hope this update helps as you think about your year-end giving. If you are not a client and are curious to learn more about these strategies, please click here to schedule a time to chat with us about amplifying your charitable giving and other ways we can assist you.
A Celebration of Gratitude
Every year we have the privilege of coming together in celebration with members of our Financial Harvest client-family. David and Katie host our client appreciation Celebration of Gratitude. During this time of fellowship, we spotlight a local charity that serves and supports what might otherwise be unmet needs in our community. This year, we are supporting the Jobs Partnership of Florida.
The Jobs Partnership of Florida prepares people for life and work with Biblical principles. LifeWorks by Jobs Partnership provides essential skills training, connections to resources, and access to better job opportunities.
It is our blessing and privilege to support and celebrate the work done by the Jobs Partnership. Please contact us if you would like to learn more about how you can join us in supporting a program that delivers real-world solutions and meaningful change for individuals and families, here in Central Florida.