6 Ways to Donate to Worthy Causes and Receive a Tax Benefit
The challenge is the 2017 Tax Cuts and Jobs Act requires you to add your charitable contributions to the sum total of your itemized deductions. If your itemized deductions don’t exceed the standard deduction, there is no tax benefit.
Many argued that this legislation would discourage charitable giving. Fortunately, there are ways to support worthy causes while still receiving a tax benefit.
Qualified Charitable Contribution (QCC)
Transferring a portion of your Required Minimum Distribution (RMD) from your IRA is not taxable and can fulfill your annual RMD requirement.
Donor Advised Fund (DAF)
Would you like a larger income tax deduction while retaining control over when and how much each charity will receive? If so, a Donor Advised Fund may be a good fit.
Charitable Gift Annuity (CGA)
When you give to a charity that has a Gift Annuity, you can receive annual income and a corresponding income tax deduction.
Stacking Outright Gifts
To make sure you surpass your standard deduction, you can make multiple gifts of cash in the same year.
Highly Appreciated Stock
You can donate appreciated stock outright to a charity and deduction. You can also donate your appreciated stock directly to a Donor Advised Fund or a Charitable Gift Annuity.
Charitable Remainder Trust (CRT)
A CRT can provide income with a corresponding income tax deduction when you donate appreciated property and cash. CRT’s are typically used for larger donations.
Charitable giving and income taxes go hand in hand. Just make sure you fully understand the finer details before you proceed. If you would like to discuss charitable giving techniques so you can make decisions and move forward with confidence, please feel free to schedule a complimentary in-person or video consultation.
Securities and advisory services offered through Commonwealth Financial Network®, Member FINRA/SIPC, a Registered Investment Adviser. Fixed insurance products are separate from and not offered through Commonwealth Financial Network®. Commonwealth and Retirement Refined, LLC do not provide tax advice. You should consult a tax professional regarding your individual situation.
