Thank you for attending the class on the tax benefits of charitable giving. Donating to charities can provide meaningful support to causes you care about while also offering potential tax advantages.

Key Takeaways and Next Steps

How Charitable Donations Impact Taxes

Donations can be cash, non-cash assets (stocks, real estate, vehicles), or Donor-Advised Funds (DAFs).
Tax deductions depend on how much you donate:
Cash donations: Deduct up to 60% of your Adjusted Gross Income (AGI).
Appreciated assets (stocks, real estate): Deduct up to 30% of your AGI while avoiding capital gains tax.
Standard vs. Itemized Deduction: For 2024, the standard deduction is $14,600 (single) and $29,200 (married), with an extra $1,550 per spouse for those 65 and older.

Tax-Saving Strategies for Charitable Giving

Bunching Donations: Donating multiple years’ worth of contributions in one year to surpass the standard deduction threshold.
Qualified Charitable Distributions (QCDs): Retirees 70½ and older can donate directly from an IRA to a charity, reducing taxable income.
Appreciated Asset Donations: Donating stocks instead of cash helps avoid capital gains taxes while still providing a full deduction.
Estate and Legacy Planning:
Charitable trusts (e.g., Charitable Remainder Trusts) can reduce estate taxes and provide income.

Important Considerations

Documentation Requirements: Keep proper records and receipts for all charitable deductions.
Eligible Organizations: Ensure the charity qualifies for tax-deductible donations (verify through IRS databases).
Common Mistakes to Avoid:
Overestimating donation value.
Failing to keep documentation.
Misunderstanding how donations impact overall taxable income.

Charitable Trusts: An Advanced Giving Strategy

Charitable Lead Trusts (CLTs): Provide annual gifts to charities, with remaining assets going to beneficiaries.
Charitable Remainder Trusts (CRTs): Provide income to beneficiaries first, then donate remaining assets to charity.
Tax Benefits:
Reduce taxable income and estate taxes.
Avoid capital gains tax.
Leave a lasting charitable legacy.
Important Note: Most charitable trusts are irrevocable, meaning they cannot be easily reversed once established.

Resources:

Disclaimer: This class is for informational purposes only and does not offer personalized tax or legal advice. Please consult a professional advisor for guidance specific to your situation.