With the end of the year fast approaching, now is the time when many people review their charitable giving to determine whether there are additional gifts they’d like to make.
Philanthropy is an incredibly powerful way to make the world a better place for others. Gifts of any size can have an impact on the community on many levels — it can buy food for animals at a local shelter; provide new books and supplies for a classroom; help bring cultural programs to under-served neighborhoods; and support important scientific research that could save lives.
You can give directly to a nonprofit, or decide to give to a foundation, such as the Community Foundation of Palm Beach and Martin Counties, which has as its mission to identify the community’s most critical needs and to help donors establish funds that address those needs.
The opportunities for charitable giving are diverse and there are many ways to give that people may be unaware of — some with appealing financial benefits.
One important tax provision that expires at the end of 2013, and may not be renewed, is called a “Qualified Charitable Distribution,” or “IRA Charitable Rollover,” which allows a donor to direct up to $100,000 from an IRA to an eligible charity, without recognizing any of the distribution as income. Donors must be at least 70½ years old to be eligible for this break. The IRA rollover gift is a simple and easy way to help your favorite charity without increasing taxable income.
Another option to consider is a charitable gift annuity. This is a contract with a nonprofit where the donor provides a gift of cash, marketable securities or other assets, and gets in return regular fixed payments for life. When you establish a gift annuity you receive an immediate tax deduction, preferential treatment of potential capital gains taxes and a portion of the income you receive may be tax-free.
Contributions of cash or stock must be made by Dec. 31 to be eligible for a deduction available to taxpayers who itemize in 2013. A gift of stock could be especially attractive this year with the recent market increases. The full value of the stock is tax deductible, but if the stock has appreciated in value, you get an additional tax benefit because you avoid paying tax on the capital gain.
Ultimately you decide how your money should be invested to make an immediate difference in the lives of others. Your philanthropy. Our community. Better together.