It is hard to believe that the Thanksgiving holiday is already upon us. It doesn’t feel too long ago that we were turning the calendar from 2023 to 2024 and ringing in the New Year. This time of the year gets extremely busy with the hustle and bustle of the holiday season, tying up loose ends on projects at work, and, the focus of this post, charitable giving before the year ends.
There are a lot of reasons to give to charity. There have been studies done showing that being charitably inclined increases happiness. That isn’t all that surprising because I feel there is an innate desire in every human, albeit to varying degrees, to want to make a positive impact on others. One of the greatest joys Clay and I get to experience as financial advisors is walking alongside our clients and helping them make positive impacts on the communities, organizations, and causes they are passionate about. Charitable giving can be as simple as pulling out the checkbook to write a check or going to an organization’s website and clicking “Give Now”. However, with some preparation, there are several ways to more tax-efficiently enhance your charitable giving.
If you are over the age of 70½, a Qualified Charitable Distribution (QCD) directly from your IRA to a charity makes a lot of sense. Typically, a distribution from an IRA is taxed as ordinary income, but not when it is a direct distribution to a charity. If you are currently giving to charitable organizations and have a required minimum distribution (RMD) from your IRA, get in contact with us at the Ryan-Jones Group to discuss Qualified Charitable Distributions as part of a charitable gifting strategy.
Another great tax-advantaged strategy for those that are charitably motivated is donating appreciated stock. As long as the stock has been held for over 12 months, you can recognize an itemized deduction equal to the value of the stock at the time of donation (deduction limited to 30% of Adjusted Gross Income). This approach avoids the payment of capital gains tax if you were to sell the appreciated stock to generate cash to then donate to a charitable organization.
QCDs and donating appreciated stock are just a couple of ways to enhance your charitable giving in a tax-efficient manner. Take a look at the Charitable Giving section of the Advanced Planning page of the Ryan-Jones Group Resource Library to learn more.