Tips for Year-end Charitable Giving

Fall is a great time to start thinking about year-end charitable giving. Most nonprofits, like GBMC, rely on annual giving to provide essential services and fulfill their missions. Here are some of the most popular ways to support your favorite charities and receive an income tax deduction.

Cash – Making a cash gift is the easiest way to give. Funds are immediately available to the charity, and you receive a current income tax deduction.

Appreciated Assets – Gifts of appreciated assets such as stocks, funds, ETFs (exchange traded funds) or real estate are another great way to support your favorite charity. You may be entitled to an income tax deduction equal to the fair market value of the appreciated asset, and the charity could liquidate it without taxation.

Charitable IRA Rollover (QCD) – If you are older than 70 ½, you may give up to $100K from an IRA to your favorite charities, which counts toward your annual required minimum distributions. The distributions are generally excluded from the donor’s and recipient charity’s taxable income.

Matching Gifts – Many employers match employee contributions to qualifying charities. It is prudent to ask your employer or financial advisor about matching gifts.

Bunching Gifts – In response to the increased standard deduction and SALT (state and local taxes) deduction limit in the 2017 Tax Act, many donors double up on charitable donations in the year they itemize deductions and then take the standard deduction the next.

Planned Gifts – Planned gifts can have a transformational impact on your favorite charity. These generally include bequests or distributions in wills or trusts, beneficiary designations on retirement accounts or life insurance, and charitable gift annuities. If you are considering a planned gift, you should discuss with your attorney, tax advisor, or directly with the charity about the income, estate and gift tax benefits of including planned gifts in your estate plan.

Disclaimer: This information is not intended as specific legal, tax or other professional advice. You should consult with your attorney, CPA or tax advisor regarding your individual circumstances.

The author, Jerry D. Focas, is an attorney with Hassani, Focas & Fifer, P.A., a member of GBMC's Board of Directors and GBMC's Philanthropy Committee, and a proud GBMC donor.