Page 10 - Hobe Sound Reflections - December '23

Page 10, Hobe Sound

FinanCial FoCus ®

Can You Make Charitable contributions could arrive when you start taking required you expand your ability to support the charitable groups
Another possible tax benefit from making charitable
whose work you admire.
Giving Less “Taxing”? minimum distributions, or RMDs, from some of your This article was written by Edward Jones for use by
retirement accounts, such as your traditional IRA and your local Edward Jones Financial Advisor, Edward
By Sally Sima Stahl 401(k). These RMDs could be sizable – and distributions Jones, Member SIPC.
Once again, it’s the are counted as taxable income. But by taking what’s Edward Jones is a licensed insurance producer in
season of generosity. In called a qualified charitable distribution (QCD), you can all states and Washington, D.C., through Edward D.
addition to considering move money from a traditional or Roth IRA to a qualified Jones & Co., L.P., and in California, New Mexico and
gifts for your loved ones, charitable organization, possibly satisfying your RMD, Massachusetts through Edward Jones Insurance Agency
you might want to think which then may be excluded from your taxable income. You of California, L.L.C.; Edward Jones Insurance Agency
about charitable gifts as must start taking RMDs at 73 but you can begin making of New Mexico, L.L.C.; and Edward Jones Insurance
well. But what should you QCDs of up to $100,000 per year as early as age 70½. (This Agency of Massachusetts, L.L.C.
know before making gifts amount will be indexed for inflation after 2023.) Edward Jones, its employees and financial advisors
to charities? And what Establishing a donor-advised fund and making cannot provide tax advice. You should consult your
impact might these gifts qualified charitable distributions are significant moves, qualified tax advisor regarding your situation.
have on your financial and so you’ll need to consult with your tax advisor first. But Contact us at (561) 748-7600, Sally Sima Stahl, AAMS,
tax situation? if they’re appropriate for your situation, they may help 1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458.
First, you may want to create a gift budget by deciding
just how much you will give to charitable organizations
over the rest of the year.
Next, look closely at the groups to whom you wish
to contribute. You can find many reputable charities, but
some others may be less worthy of your support. One of
the red flags of a questionable organization is the amount
of money it spends on administrative costs versus the
amount that goes to its stated purpose. You can check on
the spending patterns of charitable groups, and find other
valuable information about them, on the well-regarded
Charity Navigator website (charitynavigator.org).
Once you’ve established a gift budget and are
comfortable with the groups you choose to support, you
might turn your thoughts to another key issue connected
with charitable giving: tax benefits. A few years ago,
changes in the tax laws resulted in a large increase
in the standard deduction, which meant that many
taxpayers found it more favorable not to itemize – and
lost the ability to take charitable deductions. But if you
still do itemize, your charitable gifts or contributions
to tax-exempt groups – those that qualify as 501(c)(3)
organizations – can generally be deducted, up to 60
percent of your adjusted gross income, although lower
limits may apply, depending on the nature of your gift
and the organization to which you’re contributing.
Other, more long-term avenues also exist that combine
charitable giving with potential tax benefits. One such
possibility is a donor-advised fund, which allows you to
make an irrevocable charitable contribution and receive
an immediate tax deduction. You can give cash, but if
you donate appreciated assets, such as stocks, your tax
deduction would be the fair market value of the assets,
up to 30 percent of your adjusted gross income. Plus, you
would not incur the capital gains tax that would otherwise
be due upon the sale of these assets. Once you establish
a donor-advised fund, you have the flexibility to make
charitable gifts over time, and you can contribute to the
fund as often as you like.

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