As the holidays approach, many people look for ways of combining their desire to help the causes they believe in with their desire to save on taxes. For the charitably inclined, there are strategic ways of giving that can accomplish both goals.

However, if Congress passes a tax reform bill this year, it could include a proposal to increase the standard deduction. That could mean fewer people will qualify for itemized deductions such as charitable gifts.

Donations made by cash or check are, by far, the most common methods of charitable giving. However, contributing stocks, bonds, or mutual funds that have appreciated over time has become increasingly popular in recent years, and for good reasons.

Here are 3 strategies to consider that can help you make the most of your giving this year:

  1. Give appreciated securities, rather than cash 

    If your stock value has increased over time, it’s may be best to minimize your tax liability by donating this stock. Contact your brokerage firm to find out what steps you need to take; usually, you’ll need to fill out a transfer form. 

  2. Consider establishing a donor­-advised fund
    A donor-advised fund (DAF) is a program of a public charity that allows donors to make contributions to the charity, become eligible to take an immediate tax deduction, and then make recommendations on their own timetable for distributing the funds to qualified charitable organizations.
  3. Qualified charitable distribution (QCD) from an IRA

    If you are 70.5 or older and would like to make an IRA-to-charity transfer, please contact your investment advisor this week to allow enough time to take advantage of this non-taxable transfer.

Before undertaking any of these giving strategies, you should consult your legal, tax, or financial adviser. But, properly employed, each of the strategies represents a tax‐advantaged way for you to give more to your favorite charities.

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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.

This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.

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Clergy Financial Resources
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Maple Grove, MN 55369

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