4 charitable giving strategies to consider

Published on

Through charitable giving, you can support causes or organizations you believe in and lock in tax benefits simultaneously. Whether you’re new to charitable giving or a veteran, there are several strategies you should keep in mind. The giving methods you choose, what you give, and when you give can help you maximize your impact and minimize your tax burden. Here are four charitable giving strategies to consider before making your gift.

Non-cash charitable contributions

Contrary to popular belief, cash is not the only way to give back. Instead of cash, you might want to consider taking advantage of donating appreciated stock or assets that you’ve held for more than a year. Through this strategy, you’ll be able to save on capital gains taxes.

Another option is to name a charity as your life insurance policy beneficiary. Note that you can change beneficiaries if you are the owner of the policy. In addition, you can donate goods that can help an organization. If you donate goods, you can ask for a tax deduction form, as long as the goods are in good or better condition.

Qualified Charitable Distributions (QCDs)

If you're 70 1/2 or older, you can use a QCD to donate directly from your IRA to the charity of your choice. While the gift amount won't qualify for a charitable deduction, it won't be considered taxable income either. This strategy allows you to deduct the amount transferred to the charity from your taxable income. In addition to reducing your taxable income, a QCD might be helpful if you won't reach the level of itemized deductions to exceed the standard deduction amount but would still like to make charitable gifts.

Donor-Advised Funds (DAFs)

You can donate cash or other assets to a charitable investment account and receive a tax deduction immediately with a DAF. Since a DAF will grow tax-free, you may choose to distribute funds over time to organizations and causes that are important to you. If you time your contributions to coincide with higher-income years, you'll enjoy a more significant tax deduction.

Bunch your donations

Bunching or concentrating your donations in one year instead of skipping one or several years is a great way to make the most out of potential tax deductions. This option may make the most sense for your situation if your total itemized deductions for a single year fall below the standard deduction. By making charitable contributions for several years at one time, the total of your itemized deductions can exceed the standard deduction and offer some tax benefits.

Consult your financial professional

A financial professional may work with you to help you design a charitable giving strategy. Together we’ll help you review your financial situation and work towards meeting your goals. Contact us today to get started.

Important Disclosures

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.

This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.

All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.

This article was prepared by Fresh Finance.

LPL Tracking # 1-05265262

Sources:

https://money.usnews.com/financial-advisors/articles/strategies-for-charity-minded-clients

https://www.forbes.com/advisor/investing/donate-stock/

You may also like

Webster “Frontline Heroes” Program Offers Banking Support to Hartford HealthCare Employees

Webster donates $25,000 to Hartford HealthCARES Colleague Assistance Fund

Waterbury, Conn.—July 13, 2020— After introducing its innovative Frontline Heroes financial services program, Webster Bank today announced a…

article

Sharing a message with our Webster community from our Chairman and CEO

Good afternoon Webster bankers,

I reach out to you at a time of great challenge for our country, our communities and our bankers. The tragic and senseless deaths of George Floyd, Ahmaud Arbery, Breonna Taylor and other members of the black…

General Disclosures

The opinions and views in this blog post are those of the authors, and are not intended to provide specific advice or recommendations for any individual. Please consult professional advisors with regard to your individual situation.

Disclosures

Securities and insurance offered through LPL or its affiliates are:

Not Insured by FDIC or Any Other Government Agency

Not Bank Guaranteed

Not Bank Deposits or Obligations

May Lose Value

Securities and advisory services are offered through LPL Financial (LPL), a registered investment advisor and broker-dealer (member FINRA/SIPC). Insurance products are offered through LPL or its licensed affiliates. Webster Bank and Webster Investments are not registered as a broker-dealer or investment advisor. Registered representatives of LPL offer products and services using Webster Investments, and may also be employees of Webster Bank. These products and services are being offered through LPL or its affiliates, which are separate entities from, and not affiliates of, Webster Bank or Webster Investments.

The LPL Financial registered representatives associated with this website may discuss and/or transact business only with residents of the states in which they are properly registered or licensed. No offers may be made or accepted from any resident of any other state.

Your Bank (“Financial Institution”) provides referrals to financial professionals of LPL Financial LLC (“LPL”) pursuant to an agreement that allows LPL to pay the Financial Institution for these referrals. This creates an incentive for the Financial Institution to make these referrals, resulting in a conflict of interest. The Financial Institution is not a current client of LPL for brokerage or advisory services. Please visit https://www.lpl.com/disclosures/is-lpl-relationship-disclosure.html for more detailed information.

The Webster Symbol is a registered trademark in the U.S.