News of the recent tax law changes have been in the press frequently over recent months. But, unless you have taken the time to evaluate the nuts and bolts of the new tax law, you may not be benefiting from your charitable contributions as much as you could be.

Charitable giving is an American tradition. According to “Giving USA 2016, The Annual Report on Philanthropy for the Year 2015,” Americans give well over $300 billion to charities annually, the majority of which is donated by individuals. Americans are not only generous with monetary gifts, but also with gifts of time and talent.

To make the most of your monetary gifts, I wanted to offer some suggestions for you to consider as you look at opportunities for year-end giving to the charities you support. These are suggestions that should be thought through with your trusted tax accountant or other qualified financial professional. The information contained in this article is not intended to be tax advice but merely ideas for you to consider as you prepare your year-end tax strategies.

Writing a check from your checkbook is one of the most common ways to donate to charity. However, if you are over 70-1/2, you may want to read on to see how a Qualified Charitable Distribution may help you at tax time.

Due to the increase in the standard deduction as a result of the recent tax law changes, donations you make to qualified charities may not benefit you in the way they used to. For example, for individuals 65 and older, the standard deduction has increased to $13,600 and $26,600 for couples age 65 and older. For more information on your standard deduction based on age and income, you can check out the IRS website at IRS.gov or ask your tax professional.

If your itemized deductions are less than your standard deduction, it usually does not make sense to itemize. Therefore, contributions to a charity made in the manner you used to make them may not impact your tax liability as they have in the past.
If you are age 70-1/2 or older, you are obviously are aware that you need to take a Required Minimum Distribution (RMD) from your IRA or other qualified retirement account. There is a provision in the tax code allowing for a Qualified Charitable Distribution (QCD) to go directly to a charity without passing through your hands (i.e., having you take constructive receipt of the proceeds from your RMD). How does this benefit you?

If you plan to donate money to one or a number of charities before year-end, you can tell your IRA administrator, as part or all of your RMD, you would like to send a specified dollar amount to a specified charity(s). This will save you having to include that portion of your RMD as income on your income tax return. As a result, your AGI (adjusted gross income) will be lower than it would be otherwise. AGI impacts the amount of money you would owe on a tax return. Also, depending on your tax bracket, AGI could impact how much tax you pay on Social Security benefits and what you pay for Medicare premiums.

So, if you are age 70-1/2 or older and have not taken all of your RMD yet for this year, you may want to consider a QCD (Qualified Charitable Distribution) to Give Smart and Receive Tax Benefits While Doing Good!

Feel free to contact me for more information on how to take a QCD (Qualified Charitable Distribution) from your RMD (Required Minimum Distribution) and create a win-win for you and a qualified charity of your choice. We are also happy to provide other ideas for tax-efficient charitable giving that were not included in this article.

Happy year-end tax planning!

Most Sincerely,

News of the recent tax law changes have been in the press frequently over recent months. But, unless you have taken the time to evaluate the nuts and bolts of the new tax law, you may not be benefiting from your charitable contributions as much as you could be.

Charitable giving is an American tradition. According to “Giving USA 2016, The Annual Report on Philanthropy for the Year 2015,” Americans give well over $300 billion to charities annually, the majority of which is donated by individuals. Americans are not only generous with monetary gifts, but also with gifts of time and talent.

To make the most of your monetary gifts, I wanted to offer some suggestions for you to consider as you look at opportunities for year-end giving to the charities you support. These are suggestions that should be thought through with your trusted tax accountant or other qualified financial professional. The information contained in this article is not intended to be tax advice but merely ideas for you to consider as you prepare your year-end tax strategies.

Writing a check from your checkbook is one of the most common ways to donate to charity. However, if you are over 70-1/2, you may want to read on to see how a Qualified Charitable Distribution may help you at tax time.

Due to the increase in the standard deduction as a result of the recent tax law changes, donations you make to qualified charities may not benefit you in the way they used to. For example, for individuals 65 and older, the standard deduction has increased to $13,600 and $26,600 for couples age 65 and older. For more information on your standard deduction based on age and income, you can check out the IRS website at IRS.gov or ask your tax professional.

If your itemized deductions are less than your standard deduction, it usually does not make sense to itemize. Therefore, contributions to a charity made in the manner you used to make them may not impact your tax liability as they have in the past.
If you are age 70-1/2 or older, you are obviously are aware that you need to take a Required Minimum Distribution (RMD) from your IRA or other qualified retirement account. There is a provision in the tax code allowing for a Qualified Charitable Distribution (QCD) to go directly to a charity without passing through your hands (i.e., having you take constructive receipt of the proceeds from your RMD). How does this benefit you?

If you plan to donate money to one or a number of charities before year-end, you can tell your IRA administrator, as part or all of your RMD, you would like to send a specified dollar amount to a specified charity(s). This will save you having to include that portion of your RMD as income on your income tax return. As a result, your AGI (adjusted gross income) will be lower than it would be otherwise. AGI impacts the amount of money you would owe on a tax return. Also, depending on your tax bracket, AGI could impact how much tax you pay on Social Security benefits and what you pay for Medicare premiums.

So, if you are age 70-1/2 or older and have not taken all of your RMD yet for this year, you may want to consider a QCD (Qualified Charitable Distribution) to Give Smart and Receive Tax Benefits While Doing Good!

Feel free to contact me for more information on how to take a QCD (Qualified Charitable Distribution) from your RMD (Required Minimum Distribution) and create a win-win for you and a qualified charity of your choice. We are also happy to provide other ideas for tax-efficient charitable giving that were not included in this article.

Happy year-end tax planning!

Most Sincerely,