We are accustomed to supporting our favorite charities at this time of year by sending in a check or making a contribution online, but there are many more tools at our disposal that make giving easy and provide tax benefits. If you are looking to make a year-end gift, here are just a few options to consider:
- A Qualified Charitable Distribution (QCD) from your IRA: You are required to take a minimum distribution from your IRA beginning at age 70 ½, which contributes to your taxable income each year. If you don’t need that income, you can take advantage of the charitable rollover, which allows you to give up to $100,000 from your IRA directly to a qualified charitable organization. Though this gift is not eligible for a charitable deduction, you avoid receiving that taxable income while supporting a cause important to you. Most charities classified as 501c3 by the IRS are qualified to receive such a gift, though there are some restrictions. Consult your tax advisor for details and to see if this tool is a good fit for you.
- Gifts of Appreciated Stock: Charitable organizations that have investment accounts, such as the Community Foundation, can accept gifts of appreciated stock, allowing you to contribute the stock directly to the charity and avoid capital gains. The process is typically quite simple, and you’ll receive an acknowledgment for the value of the stock on the day the gift was made to claim a charitable deduction. Even if your favorite charity does not have an investment account, they may have an endowment at the Community Foundation that provides that charity with annual, ongoing support. You can direct your stock gift to that endowment.
- Planned Gifts: We often think of a planned or deferred gift as a bequest made from one’s estate, but there are numerous planned giving tools that allow you to support your favorite organizations during your lifetime or to receive an income and direct the remaining balance to a charity of choice upon your death. Consult your estate advisor for details on which planned giving tools may be right for you.
There are numerous ways beyond those listed above to support your favorite charitable organization right now and in the future. Talk with your tax advisor to find the tools best suited to your interests and financial situation. If you are interested in discussing a gift to the Community Foundation, contact Executive Director Jessica Wirgau at email@example.com or 540-381-8999.