Do You Want to Make a Difference This Holiday Season?

 Tips for Charitable Giving

Nonprofit organizations receive much of their revenue during the holiday “giving season,” with 26% of donations arriving in December.¹ If you want to contribute to causes meaningful to you, how can you make the most of your donations?

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There are different ways to financially support charitable organizations. The method you choose should be appropriate to your financial and tax situation and align with your philanthropic goals, with options that include: 

• Cash: The easiest way to give is to write a check. However, you will only get a charitable deduction on your 2024 tax return if you make your gift before December 31^st, and you itemize. For 2024, the standard deduction for married couples filing jointly is $29,200 and $14,600 for single taxpayers/married individuals filing separately.² If your total deductions fall below this amount, you will not benefit from a tax deduction on your gift.
• Appreciated Stock: Donating appreciated stock to a qualified charity allows you to give more generously than if you were to first sell the stock and donate the proceeds. If you’ve owned the stock for more than a year, you avoid paying taxes on the capital gains plus you can deduct the fair market value of the stock up to the IRS limit.
• Qualified Charitable Distributions (QCDs): If you have reached age 70 ½, a Charitable IRA distribution allows you to donate up to $105,000 ($210,000 for spouses) in 2024 to qualified charitable organizations directly from your IRA; and the gift counts toward your annual Required Minimum Distribution.³
• Donor Advised Funds (DAFs): A DAF is a tax-advantaged fund maintained by a sponsoring charitable organization, such as a community foundation, that individuals can use for charitable giving. They are easy to set up, with minimal paperwork required and no start-up fees, and they are easy to manage because the charitable sponsor handles the due diligence and reporting. Donors can take an upfront tax deduction in the year the contribution is made, make grants over time, and contribute a wide range of assets, including appreciated securities. In addition, contributions can be invested and growth passed to charities in the future.
• CRATs and CLATs: With a Charitable Remainder Annuity Trust (CRAT), you contribute property, cash, or other assets into an irrevocable trust. You receive an income tax deduction equal to the value of the remainder interest at the time of funding and get fixed payments for a pre-set term or for life. At the end of the term, the remainder of the trust transfers to a charity beneficiary. A Charitable Lead Annuity Trust (CLAT) is the opposite of a CRAT because the charitable beneficiary receives the fixed annuity payment for a pre-set term, then the remainder goes to a non-charitable beneficiary.Charitable contributions may be subject to applicable AGI (adjusted gross income) limitations on individual income tax return.Charitable giving is a win-win that helps you make a difference and financially benefits causes important to you. However, making the most of your gift can be complicated. A Mason Advisor can assist you in developing a strategic charitable giving plan.

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Disclaimer
The views, opinions and content presented are for informational purposes only and reflect the current opinion of the writers as of October 15, 2024. Opinions and forward-looking statements expressed are subject to change without notice. The content presented does not constitute investment advice, should not be used as the basis for any investment decision, and does not purport to provide any legal, tax or accounting advice.

¹ Benchmarks, M&R
² IRS provides tax inflation adjustments for tax year 2024, IRS, November 9, 2023.
³ How to Make a Tax-Free Donation from Your IRA, Morningstar, March 20, 2024