Tax Reform: Maximize Your Charitable Giving

With changes in federal tax laws in recent years that include doubling the standard deduction to $12,000 for single individuals, and $24,000 for married couples, fewer people are itemizing their deductions. However, there are still things you can do to maximize the tax benefits of your charitable giving, and the Community Foundation is a great resource to help you at no cost.

Create or use your Donor Advised Fund (DAF) at the Foundation to “bunch” multiple years of gifts into one year to take advantage of itemizing. Then, make grants from your DAF over time to provide regular support to your favorite organizations, even in years when you will not itemize. Check out our flyer that provides a simple overview of bunching.

Use part or all of the Required Minimum Distribution (RMD) from your IRA to make a Qualified Charitable Distribution gift to the Foundation. If you’re 72 or older, this may be a tax-smart way to directly transfer up to $100,000 per year to the Foundation without having to claim the distribution as income.

Stocks, bonds and mutual funds make great gifts. Simply transfer appreciated securities straight to the Foundation rather than selling first, and typically, you avoid capital gains tax. Direct this gift to one of our 470+ existing funds or create a fund of your own.

If you don’t itemize…

Take advantage of the new “above the line” federal deduction for charitable gifts totaling up to $300 per person for 2021, so a couple can deduct $600. This applies to contributions to public charities and excludes gifts to donor advised funds or supporting organizations.

Special thanks to Carrie Hindmon, CPA, CSEP, Partner at Andrews Hooper Pavlik PLC, for assisting us with this information.

Although you should always consult with your own tax and financial advisors, the Community Foundation is honored to be part of your charitable planning team.