Ask an Advisor About Charitable Giving

Ask an Advisor About Charitable Giving

The end of the year sparks many of us to give to charitable causes. What if we were more purposeful with our giving strategy? As part of year-end tax planning a financial planner can walk you through different strategies that would help maximize your impact and reduce your tax liability. 

Will gifting money reduce my tax liability?

Gifting money to a charity, a qualifying 401c3, a church, or synagogue will typically qualify you for a tax deduction and reduce your tax liability. 

Can I gift funds as part of my Required Minimum Distribution? 

When you reach age 72, the IRS requires you to take distributions from your retirement accounts. These distributions are taxable income. Using your RMD is a very tax-effective way to support a cause. The distribution is made directly to the charity and you are able to exclude the amount from taxable income. You can donate up to $100,000 of your retirement assets each year. 

Can I gift stock?

Yes, you can gift up to the gift tax limit of $15,000 of stock gift tax free. It is usually preferable to gift low basis, highly appreciated stock. Gifted stock transfers original donors basis, allowing the donor to avoid capital gains and providing stock to a beneficiary in a lower tax bracket, which lowers the overall tax on the stock. 

When do I have to make these donations?

Donations need to be postmarked by December 31st to count for the calendar year. 

A charitable giving strategy can align your financial interests with your gifting interests. If you have questions about year-end charitable giving, please connect with one of your financial advisors to discuss which options or strategies work for your situation best. 

Andrew Fincher, CFP®, AIF®

Andrew Fincher is a Financial Advisor at VLP Financial Advisors. For more than 30 years, VLP has worked successfully and effectively with all kinds of families and individuals, retirees and business owners, women and men—all pursuing their own aspirations, each investing and saving in the ways that make the most sense for them. We’ve stood with those clients through life transitions, through celebrations and challenges, through milestones and market swings. We look forward to standing with you.


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