Make Your Donations Strategic

As you build your wealth, you might be thinking about ways to give back. Charity is a valuable way to support causes important to you. Learn how charity can become a part of your financial strategy.

How  Charitable Giving Can Work for You

Charity is a generous act, and financial planning can help maximize the benefits of that generosity for the recipients and your own future. For example, strategic giving can help you save on taxes by reducing your overall tax bill and taxable estate.

How to Make Charitable Donations  

You can easily write a check to your favorite charity, but you can also consider some more strategic approaches, such as:

  • Donating assets: You can donate assets such as stocks to a charitable organization. This approach can help you save on capital gains taxes.

  • Establishing a charitable remainder trust (CRT): CRTs allow you to donate assets while providing you with an income stream. Plus, a CRT has tax benefits; you can defer any income taxes on the sale of the assets inside that trust, according to the IRS.

  • Setting up a donor-advised fund: A donor-advised fund allows you to make tax-deductible donations — cash or various assets — that can grow over time. You then get to decide where your donations go.

  • Leveraging your retirement accounts: You can take qualified charitable distributions (QCDs) from retirement accounts, such as your IRA or 401(k). The IRS allows you to make up to $100,000 in tax-free donations to charity via QCDs.

If giving back is a priority for you, a financial advisor can help you build a plan that maximizes your donations while helping you build your own financial future. Get in touch to learn more.

Silvia Evans