Year-End Charitable Gifts:
Help Beginning with Books While Decreasing Your Federal Income Taxes
Many of Beginning with Books’ generous donors sit down with their spouses, their financial advisors, and their checkbooks to make charitable gifts before the end of the tax year. In order for you to maximize the available tax advantages, please keep the following strategies in mind when making charitable gifts:
Make a Donation From Your IRA.
If you are age 70 ½ or older, you can make a rollover contribution from your IRA (either a traditional IRA or a Roth IRA) directly to Beginning with Books. The advantages to you are:
- IRA withdrawals are typically subject to the payment of federal income taxes. However, donations made from your IRA to a qualified charity are tax-free to the donor. In other words, by making the rollover contribution directly to a qualified charity, you, the owner of the IRA, pay no federal income taxes on the amount being rolled over.
- If you do not itemize deductions on your annual tax return, you do not receive a tax benefit for your charitable donations. By making a rollover contribution from your IRA, you will receive a tax benefit – you will pay no federal income taxes on the amount being contributed, whether or not you itemize.
- If you itemize your deductions, you cannot deduct more than 50% of your annual gross income for charitable contributions.
Donate Appreciated Assets
You’re probably thinking "in this crazy market my assets have depreciated, not appreciated!" But chances are that if you have held stocks or other assets for a long time, they have increased in value, and you will owe capital gains tax when you sell the asset. As a general guideline, if you donate an appreciated asset (one that you have owned for more than one year), you can deduct the full fair market value of the asset and avoid paying capital gains taxes. The tax savings using this strategy can be substantial.
Decrease Your 2010 Federal Income Tax Bill.
Of course, if you would like to achieve these tax savings, you will need to discuss the details with your accountant or tax advisor. We will be happy to work directly with you, and/or your advisors, to accomplish any of these charitable gift strategies so that both you, and Beginning with Books, can benefit. For more information, please call Linda Acheson Pool at 412-361-8560.
This information is intended to provide general information only about available charitable gift and tax strategies. It does not substitute for advice specific to your financial situation, which can only be provided by your tax or legal counsel.