You still have time to save on your taxes AND make a tangible impact that will change children’s lives! Two key incentives made by Congress to enhance tax breaks for giving during the pandemic are about to expire. December 31 is the last day to make tax-deductible charitable donations to GO Campaign for 2021 and receive the following incentives:
- Tax filers who don’t itemize deductions can receive a tax break for cash donations (made by check, credit or debit card and electronic funds transfer, among others) up to $600 for joint filers and $300 for single filers
- Taxpayers who itemize deductions can benefit from a much larger deduction for cash donations—up to 100% of adjusted gross income. Ordinarily donors can deduct cash contributions only up to 60% of income. (“Cash” includes check and credit card donations.)
According to the Wall Street Journal, these changes, plus this year’s surge in the stock market and cryptocurrency values, make it a good time for charitably inclined taxpayers to focus on getting the most bang for their donation buck via tax-efficient moves.
Here are a few more ways you can are the most of your giving before the end of the year:
Donations of Appreciated Stock
For an even greater tax benefit, donate appreciated securities, including stocks and mutual funds, and avoid paying capital gains tax. You won’t recognize the gain on the sale of the stock, and you can claim a deduction on your taxes for the full fair market value of the investment. With the stock market doing so well, this is the time to avoid paying taxes on the gains you’ve made.
To donate stocks to GO and avoid capital gains, simply click here for instructions.
This benefit, called a QCD or qualified charitable distribution, permits owners of traditional IRAs who are 70½ or older to donate account assets totaling up to $100,000 a year directly to one or more charities. If the saver is 72 or older, the donations can count toward their required annual payout from the IRA.
For charitably inclined IRA owners—especially those taking required payouts—QCDs can be a smart move. While there’s no deduction for the donation, the withdrawal doesn’t count as income, and that can help lower both income taxes and income-based Medicare premiums based on income. And donors can receive this charitable tax break even if they take the standard deduction.
As with appreciated stock, donations of crypto held longer than a year in a taxable account can also provide a deduction for its fair market value, while no tax is due on the appreciation.
At GO, we are ready to make it easy for you to donate and save on your taxes as much as possible. Please contact us and we’ll send you the quick instructions on how to easily donate stocks, bonds, cryptocurrency or shares in mutual funds. We’re also happy to talk to you or your accountant over the phone if you have any questions.
The math is simple…pay less taxes, help more children! Being “Good to GO” means more than ever, and we’re excited to see what opportunities 2022 has in store!