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Don’t Forget to Give to Charity – Here’s how!


This is the time of year when we begin to think about charity and charitable giving to others in need and to potentially create a positive impact on your tax return (pay less taxes!).

Did you know that in 2015 $373 billion was donated to charities of which 71% was given by individuals – a 4.1% increase over 2014. Quite a significant jump and perhaps an indication of a better economic environment.

No matter your choice of charities you may want to consider how you give. Here are your options:

1. Give cash and take an itemized deduction on your tax return unless you are highly compensated.

2. Give an appreciated asset like stock. The charity receives the full market value of the asset you give and you avoid paying capital gains tax on the appreciation. If you had sold the asset and gave the charity the cash, you will be subject to a capital gains tax of anywhere between 15% and 23% of the gain, depending upon your income. However, of the donors who have appreciated assets only 21% contribute those appreciated assets to charity.

3. If you are over 70 ½ and need to take a required minimum distribution (RMD) from an IRA account, you may contribute through a qualified charitable distribution (QCD). A QCD is a direct rollover to a charitable entity from your IRA. No taxes are due on the rollover distribution. Be sure to allow plenty of time for processing.

If you would like more information about how best to make charitable donations/contributions for the 2016 tax year, please let us know.

Bill Mayer, CFP ®

Bill Mayer, CFP



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