While most donors give because of their desire to improve the community and support those less fortunate, The Community Foundation of the Mahoning Valley believes with a bit of strategy, donors can also take advantage of tax benefits offered for charitable giving. Below are a few items to consider as you plan your end-of-year giving:
An increase in the Standard Deduction has left many donors looking for a different approach to their charitable giving. “Bunching” your donations with a Donor Advised Fund can help you save on your taxes, as well as provide ongoing support to the charities you love.
For example, donors can make a large single year contribution to a Donor Advised Fund. In that year, the donor would itemize their deductions. In subsequent years, they can continue to support charities they care about through their Donor Advised Fund and claim the standard deduction. When ready, the donor could “bunch” another contribution and itemize deductions in that year.
Current fund holders can use this approach, as well as others looking to open a new Donor Advised Fund. Establishing a fund is quick and easy. In most cases, you can start one in as little as a day!
IRA Charitable Rollover
Individuals with IRAs must take taxable required minimum distributions (RMD) the year the turn 70 ½, even if they don’t need the income. The Charitable Rollover, a benefit introduced as a part of the Pension Protection Act (PPA) and made permanent in 2016, allows IRA account holders to donate up to $100,000 of their RMDs a year directly to nonprofit organizations, such as the Community Foundation of the Mahoning Valley, and avoid paying income taxes on the gift. Donors can support the Foundation’s operating, endowment or grantmaking funds, as well as give to existing or create new field or interest, scholarship or designated funds. Gifts to Donor Advised Funds do not qualify.
If you are interested in learning more, please contact Shari Harrell, President, at 330-743-5555 or firstname.lastname@example.org.
This should not be viewed as tax or legal advice. Please consult your personal advisors to receive a full, accurate and independent explanation of all aspects of charitable gifts.