Tax Solutions for Charitable Giving, Ep #59

Charitable giving fills a need in our society and betters it as a whole. And until recently, donating to nonprofits helped people receive deductions on their taxes. The tax law recently changed and you may not know how your charitable contributions will affect your next tax return. We want to make sure that you continue giving to your favorite charities and that you continue to get the biggest tax benefit possible. This episode will help you find the best tax solutions for your charitable gifts and to show you how to receive the biggest tax benefit for your contribution. Listen to this episode of Financial Symmetry to hear great ways to save money on your taxes.

How charitable giving has been reshaped

The newest update to the tax law could limit charitable giving. For many, it may be challenging to find ways to continue to give and receive a tax benefit. Luckily Mike has done his homework and come up with creative solutions to this new problem. There are a couple of solutions out there. One is to do nothing. This will not harm you in any way, it will simply mean that you continue to give to your favorite nonprofits as you normally do, yet you wouldn’t receive the biggest tax benefit. 

Is it beneficial to give biannually?

Tax law can be confusing. It is hard to know what the best tax solutions are so that you receive the biggest savings. Another way to continue to give the same amount to your favorite charities is to lump your contribution so that you give a larger amount every other year rather than annually. You could receive a bigger tax benefit biannually this way. But this strategy may not be as helpful to the charity that you are trying to help. Nonprofits often rely on yearly contributions to stay afloat and this strategy could lead to financial problems for the charity. 

What is a donor-advised fund?

A donor-advised fund may be one of the best tax solutions for the newest tax law changes. You can set up a donor-advised fund with Fidelity, Vanguard, or Charles Schwab. This is an account that you can create where you can contribute the same amount that you usually do each year and realize the biggest tax savings over a period of time. This way the charity can still receive the same amount that you would normally give within the same timeframe. This fund can take many kinds of capital and turn them into cash for your favorite nonprofits to use. Listen to this episode of Financial Symmetry to hear if a donor-advised fund would be a good tax solution for you to use.

What are the best strategies for giving to a donor-advised fund?

It's best to start planning your tax year in November. With a donor-advised fund, you can give to your favorite nonprofit in many different ways, whether it be stocks, private equity, hedge fund interest, real estate, or cash. Your donor-advised fund will then give your favorite charity cash that they can use. You are able to set up your charitable donation to be gifted whenever you choose, whether it is weekly, monthly, quarterly, or yearly. Using a donor-advised fund is a great long-term tax strategy to use as part of the changing laws' tax solutions. 

Outline of This Episode [0:27] Changes in the new tax law [3:33] The new standard deduction for charitable giving has changed [5:30] What are your options? [6:45] What is a donor-advised fund? [10:48] How can you plan your estate with a donor-advised fund? [13:10] What are the best strategies for giving to a donor-advised fund? Resources & People Mentioned Ep 49 How Tax Reform May Affect You Donor Advised Fund vs. Private Foundations Ep 55 Tax Mistakes Connect With Chad and Mike https://www.financialsymmetry.com/podcast-archive/ Connect on Twitter @csmithraleigh@TeamFSINC Follow Financial Symmetry on Facebook Subscribe To This Podcast

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