New tax law and charitable giving strategies
Tax reform means new strategies for charitable giving
First and foremost, people give to a charity because they believe in its mission and want to make the world a better place. This primary motivation for charitable giving has not changed with recent tax reform.
What the Tax Cuts & Jobs Act of 2017 has changed is how traditional charitable giving strategies can be redesigned to continue to produce tax benefits for donors:
- Bundle your giving: If higher standard deductions won’t allow you to itemize every year, consider “bundling” your giving. Instead of making annual gifts of $2500, it may be that giving $5000 every other year allows you to itemize in the year you make your gifts.
- Give appreciated assets: Donating appreciated assets, like securities you’ve held for more than one year, continues to produce significant tax benefits. You’ll be able to deduct the full fair-market value of the asset and you’ll avoid paying capital gains taxes.
- Make an IRA gift: If you’re 70 ½ or older, making an IRA gift to charity will count toward your required minimum distribution. By reducing taxable income, a qualified charitable contribution made directly from your IRA to a charity may put you in a lower income tax bracket and help you avoid Medicare surcharges.
- Give through a DAF: A donor-advised fund is a charitable investment account that grows tax-free and allows you to recommend grants to charitable causes. You’ll receive a deduction for contributions to your DAF that can help you itemize and save on taxes.
To learn more about tax-wise ways to support the Franciscans, contact Colleen Cushard, Co-Director of Franciscan Ministry & Mission, at (513) 721-4700 or firstname.lastname@example.org
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