This is the time of year when many of us think about charitable giving as a part of our busy holiday to-do list. Your year-end charitable contributions bring tax benefits, so now is a good time to refresh your memory on some of the tax-smart options available to you.
Outright Giving – The simplest way to contribute to BB&N is to write a check or use your credit card. Your cash gift is tax deductible if you itemize deductions. If you do not expect to itemize this year, you may be able to strategically “bunch” your contributions—for example, making both this year’s and next year’s contributions in the same year in order to maximize your tax benefits.
Giving Appreciated Securities – You may be able to double your tax benefits by contributing stocks, bonds, or mutual funds that are now worth more than you paid for them a year or more ago (even if they have lost some value recently). You will receive an income tax charitable deduction for the share price at the time of your gift, and you avoid the capital gains tax that you would have owed if you sold them. Most gifts of securities can be electronically transferred, but be sure to direct that the securities themselves be transferred to BB&N.
BB&N’s Stock Tool can walk you through the process of stock giving in less than 5 minutes! Give before December 31st for your gifts to count on your 2022 tax return!
IRA “Charitable Rollover” – If you are age 70½ or older, a Qualified Charitable Distribution (QCD) allows you to contribute up to $100,000 from your IRA each year directly to charitable organizations with no tax on the withdrawal.
If you are age 72 or older, you are subject to a Required Minimum Distribution (RMD) in the year after you turn 72. However, your QCD contribution can help you meet your RMD without increasing your taxable income.
With BB&N's QCD tool, you can download the appropriate forms or learn more about the benefits of giving from your IRA.
Donor-Advised Fund (DAF) Distribution – Donor-advised funds are the fastest-growing charitable giving vehicle in the United States. With a DAF you may contribute a large sum to establish the fund and then over time you can recommend grants from your DAF to the organizations you wish to support, like BB&N. DAF contributions are popular at year-end since it makes your giving easy.
As always, your own advisors are in the best position to help you determine what would be most appropriate for you. We are available to work with you and your advisors as you consider gift options. Remember that some gifts can take longer to accomplish, so please be aware of timing if you are interested in meeting a year-end deadline.