Audio Version: Let Me Hear It!
The chill of crisp nights, the smell of wood smoke and the (inescapable) sounds of Mariah Carey’s holiday album… the most wonderful time of year is here! These next few weeks will mark a time of gratitude and reflection, a time of giving and of thought. For many of you, the gift-giving bug will extend beyond family and friends, to charities close to your hearts. Just like the perfect gift for your loved ones, your charitable donations also require some thought. While you wrack your mind about what to get Uncle Buck, we’d like to help with your thoughts about charitable giving. Check out the tips below to give well this year.
Be Aware of Scams: Make sure your donation goes as far as it can by searching for charities that are creating the most social good. Browse independent vetting websites like GuideStar or GiveWell for help with identifying qualified and efficient charities by cause.
Choose Wisely: Consider making your charitable gifts with appreciated stock or mutual funds rather than cash. Using appreciated securities to satisfy your gift allows you to avoid the tax on capital gains that you would otherwise pay on the sale of the appreciated securities. Be sure to request specific delivery instructions from your charity and work with your financial advisor early in December to ensure donations are made by the end of the year.
Understand the Benefits: The IRS rewards the altruistic nature of your charitable contributions with income tax deductions. If you itemize deductions on your tax returns, your donations to qualified exempt organizations may be tax-deductible. Depending on the type of charity and the asset you contribute, you can deduct up to 50% of your adjusted gross income (AGI) in the year contributions are made. Unused charitable deductions may generally be carried over and deducted over the next five years. Be sure to keep the document to support your deduction.
