What Do You Get When You Give? - By Peter Geckeler

Jennifer Hester |

The last month of the year – here we are! December brings not only cold weather & Christmas music, but it also awakens a giving spirit in many individuals & families. If you can believe it, about one-third of all annual giving occurs in the single month of December. Giving is a value ingrained in many of our clients’ hearts. The team at Legacy does all that we can to align values with financial plans; therefore, it is natural for us to incorporate charitable giving goals into the framework of our clients’ plans. This helps us develop an effective giving strategy to maximize the impact on the causes and charities important to our clients. Several tax changes went into effect for 2018, some of which directly impact charitable giving and the strategies that we recommend. So, I wanted to take a moment to share the three most prevalent strategies that we have recommended this year: 1) Load up on contributions. You may want to consider increasing your contributions to nonprofits & charities over a one-year time frame, possibly alternating years you donate to organizations but increasing the amount, so that you exceed the increased standard deduction of $24,000 and maximize the tax benefit of your generosity. One great tool to utilize this strategy is a Donor Advised Fund. 2) Make a Qualified Charitable Distribution (QCD). QCDs are non-taxable charitable contributions made directly from an IRA. These have been around for a while, but they have increased in popularity this year due to tax law changes. QCDs can be a great strategy for those taking Required Minimum Distributions (RMDs) from retirement accounts. If the QCD is done correctly, the RMD can be excluded from income entirely. While taking a charitable deduction for it is not allowed come tax time, the QCD route can be advantageous for those who were not going to be in a position to itemize anyway because of new tax rules. 3) Gift appreciated stock. Appreciated stock, rather than cash, can make an excellent asset to gift to charities. In addition to the tax deduction for the value of the stock you contribute, you do not have to claim the unrealized gain as income, therefore avoiding capital gains tax. We never recommend letting the “tax tail wag the dog” – that is making a decision purely based on the tax ramifications. But it is prudent to take advantage of all benefits provided by the tax code. If you have any questions about the above strategies, give us a call! Resource: https://loringward.com/blog/tools-help-realize-year-end-charitable-givin... http://nationalgivingmonth.org/ - stat on giving %