It does seem as if I am recapping many of the topics already covered in this years newsletters, but here is another one worthy of a second consideration: Charitable Donations.
Since we are nearing the end of the year there are a number of ways you can do good and save on taxes (although the charitable deduction is also in line to be phased-out for higher income earners in 2013 unless a patch is implemented).
Ways you can contribute to Charitable Organizations:
- you can gift cash, stock or property.
- you can deduct up to 50% of your Adjusted Gross Income as long as your gifts are to a charitable organization that meets the IRS' guidelines of a qualifying 50% Organization. You can "carryover" any excess deduction amount for up to 5 years. (and the answer is NO, you cannot deduct your contribution this past fall to any political organization!)
How to contribute:
- Just writing a check or transferring investments directly from your account are acceptible for most charities.
Do you want to get your tax deduction but spread your donations out over time? Below are a list of ways to do just that. It's a little more advanced and the only one you could probably get completed prior to year end is the first one:
- Donor Advised Fund (available through most mutual funds and The Community Foundation of Atlanta). You contribute a lump sum and each year distribute a percentage of it.
- Charitable Remainder Unitrust
- Charitable Remainder Annuity Trust
- Private Foundation: It sounds pretty cool, but unless you have $$$ Millions to donate to your Foundation, there may be more cost effective options for you (like the Donor Advised Fund above).
I hope you enjoyed this months newsletter. If you have any questions about planning or investing feel free to drop me an email:
James A. Daniel, CFP®
Disclaimer: this information is for general purposes and should not be considered tax advice. Talk with your accountant and/or advisor before implementing!