It's that time of year when many start considering their year-end charitable giving. With the new tax law changes, there are some things people should know to maximize your giving, and minimize your income tax.
1. Bunching your gifts. Rather than give smaller annual gifts to charity, consider bunching together several years of giving if you can, and take the itemized deduction that year. Then, take the standard deduction the other years. With a Donor Advised Fund set up with Brainerd Lakes Area Community Foundation, you can bunch all of your charitable giving into one pool, and simplify your tax accounting work with only one IRS gift receipt, and we write the checks.
2. If you are 70 Ā½ or older and have an IRA, donate directly to charity from your IRA and avoid paying income tax on the distribution. Save your cash for your personal needs. If leaving a legacy gift through your will, your IRA should again be your first source for giving to your heirs or charity.
3. Gift appreciated stocks or real estate for the tax deduction for the value of the gift, but pay no capital gains taxes on the increase in value from your initial purchase. BLACF specializes in facilitating these types of gifts.
4. Create a Charitable Gift Annuity, which can provide a lifetime of stable income, a tax deduction, and leave a legacy behind with a charitable fund with the balance.
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During this season of giving, we encourage you to support your favorite charities, and if we can help, let us know at 218-824-5633. There is no fee for establishing a fund, and a minimal management fee under 2 percent if it's set up. Also, consult your tax professional.
Merry Christmas and Happy Holidays to all.
Karl Samp
Executive director, Brainerd Lakes Area Community Foundation
