Tax Benefits Of Charitable Giving Using Donor-Advised Funds
Tax Benefits Of Charitable Giving Using Donor-Advised Funds
As the tax year comes to a close around the holidays, it’s common to take stock of the year’s income and turn to charitable giving to potentially offset taxes. While a generous and mutually beneficial option, this can also be tricky to navigate depending on the taxpayer’s age and income level.??
Under current tax laws, individuals aged 70 ? or older can make Qualified Charitable Distributions (QCDs) from their IRA to a charity without reporting it as income, allowing for a dollar-for-dollar income tax deduction.??
While this option provides several benefits for older investors, the SECURE Act of 2019 poses some unique challenges for younger taxpayers looking to make charitable donations.??
Fortunately, there are several financial planning strategies that can help.
One such strategy involves creating donor-advised funds as IRA beneficiaries, allowing children to use pre-tax money for charitable donations, and mitigating the impacts of the SECURE Act.?
With so many options and nuances when it comes to taxes, it’s important to understand how to invest charitable donations wisely under current tax law while preparing for potential changes on the horizon after 2025.?
Want to know more?
If you want to know more, this informative article by Nikki Sutcliffe, Stableford Capital's Director of Advisory Services can help.
This is an excellent article that gives suggestions at to how one can make a charitable contribution and get a dollar for dollar reduction in above the line taxable income.