Making a Difference Through Charitable Giving

On September 5th, consider participating in the International Day of Charity by donating to a cause or organization you value. Here are some types of Charitable Giving vehicles:

• Donor-Advised Funds: A donor-advised fund allows you to donate cash or securities, which are non-refundable to a non-profit organization.
• Real Estate: If you have a property you no longer need, you can donate it to charity.
• Cash: With a simple cash gift, you’ll receive a tax deduction that is equal to the amount of money you donated minus the value of any products or services you received in return.
• Charitable Trusts: The two types of charitable trusts you may want to incorporate into your financial plan include charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). Consult your legal professional and financial professional if you plan to include securities in your trust.
• Life Insurance: You can name a charity or non-profit as the beneficiary of your life insurance policy. Contact your insurance professional if you have questions regarding how to use life insurance for charity funding.

COVID-19 and Charitable Giving

Charitable giving was at an all-time high during the pandemic. Charitable Giving reached a record of $471 billion in 2020. Many Americans choose charitable giving as a way to help others during this unprecedented time. Since they couldn’t volunteer in-person at local charities, many donated their financial resources, despite the economic hardships they may have endured.

Tax Benefits and Charitable Giving

If you itemize your taxes, charitable contributions can help reduce your tax bill. Thanks to the Consolidated Appropriations Act, you may deduct up to 100% of your contribution from your adjusted gross income each time you make a donation to a qualified charity in 2021. If you decide to give to a charity, ensure it’s a 501(c)(3) public charity or private foundation to receive tax benefits. Then, keep a receipt or another record of your contribution. At tax season, itemize your deductions (if appropriate to your situation) and file your tax return. Your tax professional can help you determine how charitable contributions will impact your tax situation.

Consult Your Financial Professional

If you have any questions on charitable giving or how it may impact your financial situation, contact us today to learn more about how we can help your giving ability.

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