Year-end charitable giving tips to consider

If you’re looking to give at year-end while enjoying the tax benefits of giving, it’s important that you keep any deadlines in mind. In order for you to deduct any charitable gift from this year’s taxes, your gift must typically be received by December 31 of the same year.

To make your tax-deductible donation, ensure you’re giving to a qualified charity (generally any 501(c)(3) charitable organization) and that you learn the charity’s deadlines for donations. Deadlines may differ by your gift’s delivery method or asset type, so remember to be specific when determining your deadlines. That way, you can ensure your gift is supporting your overall tax strategy.

You may immediately think of cash when considering your options for year-end giving, but both you and your favorite charity can get more benefits when you donate other assets.

For example, when you give an appreciated asset directly to charity, you won’t have to pay capital gains taxes on that asset, and neither will the charity when the organization sells the asset.

By reviewing your full portfolio, you can tap into more giving options and make strategic charitable giving part of your holistic financial strategy. If you have appreciated or illiquid assets you’d like to give to charity before the end of the year, we can help you directly donate a variety of complex assets. 

To get the most out of your year-end giving, ensure you’re aligning your tax strategy with your charitable gifts. For example, you’ll need to itemize your deductions rather than taking the standard tax deduction.

Additionally, there are limits on how much you can deduct based on your adjusted gross income. However, you can carry over excess charitable giving for up to 5 years. So rather than just focusing on the current year, consider how a charitable gift at the end of the year could bring benefits over several years.

Want to see how much you could save on your taxes this year? Try our Tax-Savings Calculator.

Year-end isn’t particularly known for being a calm time of year. And with so much going on, you may know what you want to give, but not exactly where to direct your gift.

With a donor-advised fund (DAF), you can take advantage of the immediate tax benefits of giving, invest the charitable assets, and then recommend grants when you know exactly where you’d like funds to be directed. It’s also easy to get started with a DAF before the December 31 deadline, whereas other giving vehicles, such as private foundations and charitable trusts, require more time and administrative support.