Giving Tuesday: The Different Ways to Give
Charitable giving is an important part of my financial plan and based on my anecdotal experience as a financial planner, I’d say it more than likely is a part of YOUR plan as well. There are many emotional and spiritual rewards to giving of our time, talents and resources to the people, places and causes that are need and dear to us. There can also be financial benefits too.
Giving Tuesday started as a hashtag for social media activism about 10 years ago, and since, has become an unofficial “holiday” where non-profits and charitable organizations tap into the generous hearts of their supporters. It is always the Tuesday after Thanksgiving, making December 3rd Giving Tuesday for 2024. If charitable giving is an ongoing part of your financial plan, and you have yet to finalize your gifts for 2024, consider the many different ways you can plan to gift again this year, and how that might impact your taxes going forward.
1. Cash – The most common way to make a gift or pledge is by simply writing a check to the organization. Or in the world of online giving, by using your debit or credit card on the chosen organization’s website. There’s nothing fancy or special to consider here.
2. Securities – Depending on your situation, you might instead consider gifting an investment that you hold outside of any retirement account. Perhaps you own an investment that you’ve held for a long time. If you were to sell it in the future, you might owe capital gains taxes on the appreciated value. Gifting to a non-profit presents an opportunity to avoid that potential taxation in the future – an added benefit to you. Gifting securities isn’t as easy as writing a check or clicking a couple buttons on a website. You’ll need to contact your financial institution and also collect the organization’s financial institution’s information to connect the two. So don’t wait until December to get that process started!
3. Required Minimum Distributions – What’s better than getting a tax deduction? Avoiding income taxes altogether! If you’re over the age of 70.5 and required to take income taxable distributions from your retirement account, you could choose to gift a portion of that distribution directly to a charity and therefor reduce your income taxes for the given year. It’s called a “qualified charitable distribution” (QCD) and is another way to enhance the tax benefits of giving. There are specific rules to be followed when making a QCD – including the fact that all donations must occur BEFORE any distribution to yourself. So, this too takes some proactive planning.
If part of the purpose of money in your life is for others to benefit from your generosity, then consider the different ways to do so that might also benefit you. The current tax code has a historically high threshold for itemizing deductions, making the manner in which you gift worth consideration. If you have questions, don’t hesitate to reach out!
Investment Advice offered through Great Valley Advisor Group, a Registered Investment Advisor. Great Valley Advisor Group and Haas Financial Group are separate entities. This is not intended to be used as tax or legal advice. Please consult a tax or legal professional for specific information and advice.
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