Wondering if you’re best prepared for the upcoming giving season?
The holidays will be here before you know it, and in order to minimize stress and maximize your gifting abilities, it’s important to keep in mind a few details that you may or may not be aware of.
If you’re unsure how your finances match up with your upcoming year-end giving strategy, now is the time to prepare by making your lists and checking them twice. Organization is key in order to properly give this holiday season. Follow the five tips below to maximize your charitable giving strategy this year.
1. Do Your Research
By using sites such as Guidestar or the Better Business Bureau’s Wise Giving Alliance, you can learn more about the groups you’re interested in offering donations.
The organization you’re involved with should also be able to provide registration information, including 501(c)(3) status and tax identification number. You may also use the tax-exempt organization search tool available on the IRS website to obtain more specific information about the organization.
2. Bundle Your Donations
As deductions have increased over the years, you may choose to save money over time and donate every few years as opposed to consecutively each year. By doing this, you may receive your itemized deductions over the limit one year and take the standard deduction the next.
If you’re interested in accomplishing this, you might consider a donor-advised fund, which allows you to make a charitable donation and immediately receive a tax break. You’ll then receive recommended grants from the fund to your preferred charities over time.
3. Donate Appreciated Stock
By donating stocks or other appreciated assets, such as artwork or antiques, you might reduce capital gains taxes on investments.1
In particular, high-income earners might consider a non-cash donation specifically because of the tax advantages they may be awarded. Even those who have what they might consider to be small holdings could benefit by making a donation of appreciated investments this holiday season.
4. Utilize Your IRA
If you’re a retiree over the age of 70½, you might consider transferring money from your IRA to a qualifying charity. These distributions can be a tax-efficient way of meeting any required minimum distribution. Additionally, there’s no need to itemize your deductions in order to benefit.
You may distribute up to $100,000 per year, per taxpayer. This increases to an acceptable $200,000 for married couples if they both have IRAs.2 Although this strategy has existed for some time, it only recently became a part of the permanent tax code.
5. Monitor and Evaluate Your Portfolio
No matter the size of your seasonal contributions, it’s always important to keep up with your portfolio to give properly and confidently. Staying up to date on newsletters, annual reports and CEO updates can be an important factor when it comes to understanding the operations of various organizations.
It’s important to set personal reminders, at least annually, to re-evaluate your financial and personal priorities and update them if need be. Your interests and priorities are bound to change over time and so will the causes you choose to support. Being aware of these fluctuations is key, and maintaining a thoughtful attitude is what makes the holidays meaningful.
Jeff Spitzmiller is the CEO of Ohana Wealth & Life Planning based in Cincinnati, OH. Ohana specializes in life and financial planning along with ESG (Environmental, Social, Governance) investing principles for professionals in the healthcare and university fields. The firm is an independent financial advisor and a fee-only fiduciary. Jeff and the firm also enjoy volunteering and giving back to the local community. You can reach Jeff at firstname.lastname@example.org.This was prepared by Ohana Wealth & Life Planning; a federally registered investment adviser under the Investment Advisers Act of 1940. Registration as an investment adviser does not imply a certain level of skill or training. The oral and written communications of an adviser provide you with information about which you determine to hire or retain an adviser. Ohana Wealth & Life Planning Form ADV Part 2A & 2B can be obtained by written request directly to Ohana Wealth & Life Planning 212 East Third St. Ste. #100 Cincinnati, OH 45202. All opinions and estimates constitute the firm’s judgment as of the date of this report and are subject to change without notice. This is provided to investment advisory services clients of Ohana Wealth & Life Planning. It is not intended as an offer or solicitation with respect to the purchase or sale of any security. Investing may involve risk including loss of principal. Investment returns, particularly over shorter time periods are highly dependent on trends in the various investment markets. Past performance is no guarantee of future results. The information herein was obtained from various sources. Ohana Wealth & Life Planning does not guarantee the accuracy or completeness of such information provided by third parties. The information given is as of the date indicated and believed to be reliable. Ohana Wealth & Life Planning assumes no obligation to update this information, or to advise on further developments relating to it. This is for informational purposes only. It does not address specific investment objectives, or the financial situation and the particular needs of any person. An index is a portfolio of specific securities, the performance of which is often used as a benchmark in judging the relative performance of certain asset classes. Indexes are unmanaged portfolios and investors cannot invest directly in an index. An index does not charge management fees or brokerage expenses, and no such fees or expenses were deducted from the performance shown.