Page 6 - The Shores of Jupiter - December '23

Page 6, The Shores

Financial Focus ®

can you make charitable

Giving less “taxing”?

By Sally Sima Stahl
Once again, it’s the
season of generosity. In
addition to considering
gifts for your loved ones,
you might want to think
about charitable gifts as
well. But what should
you know before making
gifts to charities? And
what impact might
these gifts have on your
financial and tax situation?
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.
Another possible tax benefit from making charitable
contributions could arrive when you start taking required
minimum distributions, or RMDs, from some of your
retirement accounts, such as your traditional IRA and
401(k). These RMDs could be sizable – and distributions
are counted as taxable income. But by taking what’s 747-PALM
called a qualified charitable distribution (QCD), you can
move money from a traditional or Roth IRA to a qualified 747-7256
charitable organization, possibly satisfying your RMD,
which then may be excluded from your taxable income. You
must start taking RMDs at 73 but you can begin making
QCDs of up to $100,000 per year as early as age 70½. (This “Service is our number one priority”
amount will be indexed for inflation after 2023.)
Establishing a donor-advised fund and making 561-743-0070
qualified charitable distributions are significant
moves, so you’ll need to consult with your tax advisor www.palmspoolservices.com
first. But if they’re appropriate for your situation,
they may help you expand your ability to support the
charitable groups whose work you admire.
This article was written by Edward Jones for use by
your local Edward Jones Financial Advisor, Edward
Jones, Member SIPC.
Edward Jones is a licensed insurance producer
in all states and Washington, D.C., through Edward
D. Jones & Co., L.P., and in California, New Mexico
and Massachusetts through Edward Jones Insurance
Agency of California, L.L.C.; Edward Jones Insurance
Agency of New Mexico, L.L.C.; and Edward Jones
Insurance Agency of Massachusetts, L.L.C.
Edward Jones, its employees and financial advisors
cannot provide tax advice. You should consult your Expires 1/15/24.
qualified tax advisor regarding your situation.
Contact us at (561) 748-7600, Sally Sima Stahl, AAMS, State Licensed & Insured
1851 W. Indiantown Road, Ste. 106, Jupiter, FL 33458. Serving Palm Beach County CPC # 1457468 • LPG#30099