Turn your generosity into the greatest tax savings.
Donating your time and money is a powerful way to support communities and causes. Make the most of your giving by partnering with a team of tax experts who will ensure your generosity yields the highest return.
ASK AN ADVISORMany altruistic individuals make a practice of giving each year as well as having long term goals for how to distribute their wealth to better the world.
There are numerous ways to structure your donations. You may have a set amount you wish to give each year to a religious, philanthropic, cultural, or other nonprofit organization. Your plans may also include more ambitious goals for meeting significant, longer term commitments. Meeting these goals can be accomplished in a way that brings you maximum tax benefits.
We can help you navigate your options for the types of assets to contribute (cash, stocks or bonds, real estate, or others) as well as how to structure your contribution.
Every time you donate to charity, you should consider the opportunity to maximize your tax savings. As your financial commitment to charity increases, you will also encounter added complexities associated with supporting the causes you care most about. We are here to guide you through the many rules and will help you make the decisions that will work best for you personally and in a tax-efficient manner.
Do you understand your options for giving and what the tax implications will be? Below are some of the options as to how to give and what to give to charity.
Cash is the simplest way to give to your preferred charity, but there are limits and other considerations that could impact your tax deduction. Before making a cash donation, you should understand these limits and whether giving other types of assets results in a more favorable tax result.
It is important to review the amount as well as the timing of your charitable donations to maximize your tax savings. We can assist you in analyzing the tax benefits associated with various levels of giving annually and over a period of years.
One of the most tax efficient ways to give is to transfer qualifying appreciated assets that you have held for more than a year. Assets to consider contributing include stocks, bonds, real estate and artwork among others.
Coordination of non-cash donations to charities should be planned to ensure that the organization can accept the asset and that you will meet all the technical tax requirements. When structured properly, donating appreciated assets can allow you to deduct the fair market value of the assets contributed without recognizing a taxable gain on the appreciation – a win for you and a win for charity.
You’ve faithfully contributed to your retirement accounts in order to save for retirement while saving taxes. However, when it comes time to withdraw your retirement funds there is often a significant tax bill to pay. A transfer of retirement assets to charity can reduce your tax bill.
That is why donating to charity using retirement assets can be an effective way to give. Whether you make qualified charitable contributions out of your required minimum distributions or you designate one or more charities as beneficiaries of your retirement accounts, the tax savings can be very substantial.
We can help you to see how to save taxes by giving to charity using your retirement assets.
Private foundations provide a structured and legal approach to longer term charitable goals.
Contributions (subject to various limitations) result in an immediate tax deduction while allowing the donor,and oftentimes future generations, the ability to make annual gifts while investing and growing the remainder of the funds.
A private foundation can often be used to meet charitable goals, obtain tax benefits and allow younger family members to be a part of the giving process.
Setting up and maintaining a private foundation results in both opportunities as well as hurdles to overcome. We can help you understand the ins and the outs of private foundations so you make the right decision to establish and protect your legacy.
Similar to private foundations, donor advised funds have many of the same benefits but are often easier to set up and maintain.
The tax deduction limitations are more beneficial than with private foundations and currently there are no requirements for annual donations from these funds to specific charities.
The simplicity and ability to defer gifts make donor advised funds ideal for those who know they want to give but don’t know which specific charities they want to support. However, it should be noted that donors have less control with these types of funds than with private foundations.
We can guide you through this choice and help you arrive at a decision that maximizes your tax benefit while giving you the right amount of control over the allocation of your charitable gifts.
In addition to giving assets outright to charity, private foundations or donor advised funds, there are other structured giving options that may be appropriate for you. Two such options to consider are charitable remainder trusts and charitable lead trusts.
Charitable remainder trusts and charitable lead trusts can be used to obtain current tax benefits while generating current income for you or charity. The determination as to when to use these involve an analysis of your financial planning objectives in conjunction with your charitable goals.
There are plenty of ways to leverage your generous giving to do the most good while yielding the most tax savings. We can help you understand your options and help you to decide how you can make the biggest impact with your giving.
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Tom Nahigian, retired CFO of Abatement Technologies
“We use Smith + Howard for our audit, tax and special project work. Their advice and counsel is exceptional. Most recently, without Smith + Howard’s advice, we would have missed out on a $4M refund from a tax incentive program.”
David Seem, CFO, Miller-Zell
“Their mindset is different. They’re constantly looking to see what our objectives are and they’re giving us the best possible advice and keeping up with all the rules and regulations. It’s like having an expert looking over your shoulder with what you’re doing.”
Raj Anand, CEO, Southern States, LLCRules and limitations apply to charitable giving. To start with, charities must be approved by the IRS in order for donors to take a tax deduction. Next supporting documentation, receipts and proof of valuation must be obtained. Finally, there are annual dollar limitations as to how much can be deducted. On top of this, there are many other rules to comply with to ensure maximum tax benefits.
Trust us. We have been assisting our clients for more than 50 years, guiding them through their many charitable giving options. As a premier firm serving both individuals and nonprofit organizations, we have unique expertise that allows you to meet your charitable objectives while saving taxes.
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