Fall Jumpstart to Planning

By Michelle Lippart Hardwick

We still have a little bit of autumn left before winter rolls in, and many people are thinking ahead to the holiday season. It’s the best time to start planning for any year-end giving you intend to do.

Michelle Lippart Hardwick

As the director of gift planning for the Community Foundation, I help donors wade through the 2018 tax law changes and establish a tax-wise plan that achieves their charitable goals.

One major change that may impact donors is the standard deduction. It’s nearly doubled – increasing from $6,350 to $12,000 for individuals, and from $12,700 to $24,000 for joint filers – while eliminating and capping other deductions.

These changes mean more taxpayers may favor the standard deduction, vs. itemizing your deductions, including charitable deductions. Even if you don’t itemize your deductions, you might want to consider some advantageous giving options this year and in the future.

Bunch deductions into alternate years

• You can “bunch or bundle” donations in specific years, while limiting donations in other years. By bunching contributions (and other deductions), you may itemize and exceed the new standard deduction in one year and take the standard deduction the next.

Donor Advised Funds

• Paired with the strategy of bunching, establishing or contributing to a donor advised fund at the Community Foundation allows you to make a larger charitable contribution in one year and make grant recommendations to release the fund to your favorite charities annually. The charitable organizations and timing of distributions do not need to be identified at the time a contribution is made to a donor advised fund.

Qualified Charitable Distributions

• If you are 70 ½ or older, you may transfer up to $100,000 per year directly from your IRA to charity. By using a qualified charitable distribution (QCD) from your IRA, you can meet your required minimum distribution and reduce your income, even if you don’t itemize. Under current law, IRA transfers to donor advised funds don’t qualify, but we offer other types of funds that qualify.

Appreciated Securities

• If you have owned the securities for at least one year, your gift will not trigger any capital gains tax and fair market value of the securities on the date of gift may be deductible in full. Please contact us in advance when transferring securities to ensure an accurate and prompt transfer.

If you have a financial advisor, you will want to contact him or her before the end of the year to determine how the new tax laws may affect you. To learn more about establishing or adding to a charitable fund, please contact me at the Foundation.