For those who may be impacted by the new standard deduction and can no longer itemize charitable gifts, consider applying two years of giving in one year.
CINCINNATI (PRWEB) December 18, 2018
The Tax Cuts and Jobs Act of 2017 includes several changes that will impact your tax planning this year, says Chris Flores, owner of Three Corners Capital, a Cincinnati financial advisory firm that focuses on socially-responsible investing.
Of the changes, the increased standard deduction has many people wondering what the impact on charitable giving will be.
The Giving USA 2017 report, which provides data, insights and trends that help inform the fundraising strategies of many national nonprofit organizations, reports that Americans are donated a record $410 billion to charities last year. But beginning in 2018, new tax rules for donations go into effect.
Flores, who helps clients invest for people, the planet and profits, wants to help donors give generously and wisely. He lists his top five giving strategies to maximize charitable impact and tax planning.
1) Gift appreciated assets like stocks, ETFs and mutual funds. "With markets doing well over the last several years, you may have investments with capital gains," he says. "In lieu of giving cash, gift an equivalent value of shares. These donations are not taxable to you or the intended charity, and neither are the gains. An added benefit is that because of the growth, your gift doesn’t “cost” you as much."
2) Consider “bunching” your giving. For those who may be impacted by the new standard deduction and can no longer itemize charitable gifts, consider applying two years of giving in one year, Flores recommends. "For example, defer 2018 gifts to 2019. You’ll realize the standard deduction this year and may be able to itemize next year."
3) Use your IRA for giving. A less common gift are Qualified Charitable Distributions from IRAs. Once a person turns age 70.5 years old, the IRS requires minimum distributions (RMDs) from qualified retirement accounts; however, the IRS allows individuals to give RMDs directly to charities to the tune of up to $100,000 per year.
"There is no upfront tax deduction for the gift, but you are also not being taxed on the income," says Flores. "Again, for those where the itemized deduction may not apply, giving through your RMD would be a way to reduce your taxable income."
4) Donate your car. Used cars are currently valued at a premium as a result of natural disasters that have increased the need for cars and competition in the used-car marketplace. This year could be a good year to consider donating your car and getting a better value for your gift, says Flores.
"Donating a car could also be helpful for people on the border of using the standard deduction versus itemizing deductions," says Flores. "Consider donating to a local organization like Changing Gears, a nonprofit with a mission to provide affordable vehicles for people who are working their way out of poverty."
Volunteers there believe that when their clients have access to affordable, private transportation, they’ll be able to find jobs that are not limited by local bus system’s routes and schedules. "Having a car can save time getting to work, dropping off kids to childcare and accomplishing other daily tasks, as well as the empowerment that comes from ownership of a vehicle," says Flores. "Other worthy national organizations that take donated cars include Goodwill or St. Vincent de Paul."
5) Utilize a Donor-Advised Fund. A donor-advised fund provides a low-cost and private way to give. Furthermore, contributions can be invested to help grow your giving impact.
"A donor-advised fund allows you to make your gift now and receive the upfront tax deduction," says Flores. "However, unlike giving directly to a charity, with a donor-advised fund you can delay giving to qualified charities until you are confident where you would like your money to go."
Flores' firm, Three Corners Capital, specializes in incorporating financial planning with environmental, social governance and other values-driven criteria and helps establish donor-advised funds with trusted community partners like the Greater Cincinnati Foundation, in addition to other national options.
"We work with clients to establish donor-advised funds that create a triple bottom line—positively impacting people, the planet and profit," says Flores.
For more information about socially-responsible investing or to set up a donor-advised fund, contact Flores at Chris.Flores(at)ThreeCornersCapital.com or call (513) 745-7014.
Chris Flores, Three Corners Capital
Phone: (513) 745-7014
About Chris Flores:
Chris Flores is a registered representative with Lincoln Financial Advisors Corp., a broker/dealer (member SIPC) and registered investment advisor offering insurance offered through Lincoln affiliates and other companies. Lincoln Financial Advisors Corp. and its representatives do not provide legal or tax advice. Three Corners Capital is not an affiliate of Lincoln Financial Advisors Corp. CRN-1895139-091317
About Three Corners Capital:
Three Corners Capital in Cincinnati, Ohio, is a financial advising firm specializing in socially-responsible investing and charitable planning. Flores also works with clients to establish donor-advised funds that create a triple bottom line—positively impacting people, the planet and profit.