Smart Tax Planning Strategies to Enhance Your Charitable Giving
Take advantage with our help!
By Sam Young
November 19, 2021
Wouldn’t it be great if you could support the movement for improved care and expanded options at the end of life while also receiving more financial and tax benefits for your giving? You can!
There’s still time in 2021 to take advantage of two taxwise giving strategies that may provide more benefits to you than sending a check or giving online. When deciding on your year-end giving, consider these options:
Two popular options for creating a planned gift are:
- Request a tax-free distribution from your Individual Retirement Account (IRA) directly to Compassion & Choices, if you are age 70½ or older.
- Donate appreciated assets, such as stocks, bonds, and mutual fund shares to avoid capital gains taxes and generate an income tax deduction.
Giving Strategy 1: The IRA Qualified Charitable Distribution (QCD)
If you are age 70½, your traditional IRA can be a taxwise source for charitable giving. How? You can request a distribution from your IRA directly to Compassion & Choices as a Qualified Charitable Distribution (QCD). Your distribution will not only be tax-free, but it will also help you meet your annual required minimum distribution (RMD) if you are 72½. Most importantly the IRA income must pass directly to us. A married couple can donate up to $100,000 each annually through a QCD.
Giving Strategy 2: Capital Gains Bypass on Appreciated Assets
If you have stocks, bonds, mutual fund shares or other assets that you’ve held for more than a year and have grown in value, they offer a double tax benefit when donated to Compassion & Choices. You may be able to take a charitable income tax deduction for the market value of the assets, depending on your income tax situation, and you also bypass any capital gains taxes that would have been due had you simply sold them.
And in 2021, as an added bonus for those who itemize their charitable deductions, you can deduct 100% of your Adjusted Gross Income (AGI) (this deduction will revert back to 60% in 2022).
Thank you for being a partner in Compassion & Choices’ mission. Together, we can empower everyone to chart their own unique end-of-life journey.
Samuel B. Young, ESQ-LSW
Director of Legacy & Planned Giving
Compassion & Choices
P.S. JOIN OUR LEGACY CHALLENGE MATCH and $500 will be donated in your honor by an anonymous couple when you notify Compassion & Choices of your planned gift. Or try our new no-cost tool – a collaboration of Compassion & Choices and FreeWill – which allows you to create a personalized will and leave a bequest to Compassion & Choices if you choose.