|As 2023 comes to a close, generosity is in full swing. Did you know that nonprofits receive nearly half of their donations from individuals in the final quarter of each year? In this spirit of giving, we’re sharing some ways donors in the Capital Region are maximizing their charitable impact.
Amplify your impact with a gift to the Community Foundation. By making a gift to the annual appeal, you can support hundreds of nonprofits working to address urgent challenges in our region.
Standard deduction reminders. Remember that the 2023 standard deduction for single taxpayers ($13,850) and married filing jointly ($27,700) is up nearly 7% over 2022. While this increase allows for more relief from income tax for most filers, it also sets a higher bar to exceed for those who itemize deductions. Keep your household’s standard deduction amount in mind when you tally your deductible expenditures, including your gifts to charity.
Itemization and bunching. If your total deductions are at or under the standard deduction amount for 2023, but you and your advisors determine that you could benefit from increased deductions, a “bunching” strategy may be a good fit for you. “Bunching” means you are “front-loading” charitable donations into the current year, knowing that you plan to make these donations in future years. By structuring a large year-end gift to your donor-advised fund at the Community Foundation, you could surpass the standard deduction threshold to further reduce your taxes in 2023. Your donor advised fund is a great tool to help you easily support the causes you love and our team can help you build a strategy!
Stock, not cash! As you prepare for year-end giving, don’t automatically reach for the checkbook! Gifts of long-term appreciated stock to your donor-advised or other type of fund at the Community Foundation is one of the most tax-savvy ways to support your favorite charitable causes. Similarly, if you are a business owner, you can work with your advisors and the Community Foundation team to explore how you might give shares in the business to your fund at the Foundation as a part of your overall estate plan.
QCDs from IRAs. As always, keep in mind that the Qualified Charitable Distribution (“QCD”) is a very smart way to support charitable causes, including the Community Foundation’s Annual Fund. If you are over the age of 70 ½, you can direct up to $100,000 from your IRA to certain charities, including a field-of-interest, designated, unrestricted, or scholarship fund at the Community Foundation. If you’re subject to the rules for Required Minimum Distributions (RMDs), QCDs count toward those RMDs.
Fingers crossed on deduction legislation. Keep an eye on the Charitable Act, which, if passed, would permit a deduction for charitable gifts that exceed the standard deduction. The Charitable Act proposes to restore the pandemic-era “universal charitable deduction” and raise the cap from $300 for individuals ($600 for joint filers) to approximately $4,600 for individuals ($9,200 for joint filers). This could be a game-changing incentive for your favorite charities–and for you!
Check in with your tax advisor to determine if any of these strategies are a good fit for you and your charitable goals.
Don’t miss year-end deadlines.
Important Giving Deadlines for 2023