Your End-of-Year Charitable Giving Guide

The “giving season” is almost here, and your thoughts may be turning to families and organizations in need that could benefit from your generosity. Among the many reasons to engage in charitable giving, it’s a great way to reduce tax burden while doing some good in the world. If you’re on the fence about it, here are a few things to consider:

  • Talk to your people.

    The charitable giving process — like many things involving tax law — can be complicated. It’s important to understand the impact a significant charitable donation could have on your taxes and estate. Your Bartlett advisor can review your income, appreciated assets, stock portfolio, and other tax liability factors to help you pinpoint an appropriate gifting strategy. If yours is a recurring contribution, he or she can bring you up to speed on any changes that took place over the previous tax year.

  • Choose how (and how much) you’ll give.

    Writing a large check to your charity of choice is hardly the only way to manage your philanthropic giving. Explore a Donor Advised Fund, for example, which lets you receive the full charitable tax benefits for your gifts. Then, employ the 50/30/20 rule: 50% of your giving to organizations that support causes you are most passionate about; 30% to orgs where you have a loyalty or obligation; and 20% to unplanned request.

  • Vet each organization.

    Having trouble distinguishing between worthy organizations? Visit sites like GiveWell, GuideStar, and Charity Navigator to view Form 990s and learn more about where your contributions are going. If you’re still stumped, connect with people in your community. Ask friends which causes or organizations they support locally. Or connect with with the experts from your local community foundation for giving to help make your decision easier.

  • Know the rules.

    The IRS has very specific guidelines for annual giving. For example, only donations to charitable organizations are deductible, and you must show a bank record (such as a canceled check or credit card receipt) for cash deductions, regardless of the amount. Be sure to carefully review the process before you begin.

  • Don’t get sidetracked.

    Contributions are deductible in the year made, so if you get derailed by the holiday hustle, it could mean waiting an extra year to reap tax benefits.

Between parties, houseguests, shopping, and real-life obligations, the holidays can be hectic — and there’s no time to waste poring over confusing tax forms. The sooner you execute your giving strategy, the sooner you can start making holiday memories with loved ones. Bonus tip: Engage your family in discussions about charitable giving. It’s a great way to share family values and build a long-lasting legacy!

Not sure where to start? Our family office services help families pinpoint appropriate giving strategies, evaluate charitable organizations, and clarify specific IRS guidelines. 

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