Minimizing Taxes with Year End Charitable Giving
This is the time of year when many are simultaneously celebrating the holidays, spending time with family and friends, being appreciative for what they have and making plans to keep as much of it as possible. At this moment it is still unclear what the pending tax changes will mean for 2018. However, it’s not too late to minimize your taxes for this year by maximizing charitable contributions. Here are some suggestions to consider for 2017 and beyond.
First, rethink your definition of philanthropy. You don’t have to be a millionaire to make a difference. This is certainly true locally where many of our nonprofits regularly receive modest contributions from supporters. At the Sonora Area Foundation we hold almost 200 charitable giving funds supporting numerous community programs, organizations and causes (education, the arts, health care, historic preservation, children, the elderly and disadvantaged individuals) and anyone can donate any amount to any of the funds held at the Foundation. There is a local philanthropist who sends a check for $5 each month to our Trail Me About It Fund. Be a philanthropist.
Another option is to donate stock directly to a charity. We have several donors who regularly donate appreciated stock directly to Sonora Area Foundation and by doing so avoid capital gains while receiving a tax deduction. Call our office to ask how you can donate appreciated stock directly to Sonora Area Foundation.
Many Tuolumne County residents are in the category (generally those age 70 ½ and older) requiring minimum distributions from their individual retirement account. These RMD’s are subject to income tax. However, the IRS allows up to $100,000 per year to be donated to qualified charities, such as Sonora Area Foundation, without tax consequence. The donor may give the entire distribution of just a portion. Another benefit of this strategy is that it lowers the donor’s taxable income and can potentially reduce the amount of Social Security payments that might be taxable.
Finally an increasingly popular charitable giving vehicle is a donor-advised fund. Those establishing a donor-advised fund with Sonora Area Foundation receive a tax deduction for a charitable donation immediately but have the flexibility to make charitable grants later. A donor-advised fund can be established at Sonora Area Foundation with a minimum contribution of $5000.
All of the services outlined above come without any administrative fees. 100% of your donation to Sonora Area Foundation will go to support your desired charitable organization, program or cause.
Please contact our office for more information. We are located at 362 South Stewart Street in Sonora and our phone number is 209-533-2596. Year end donations may be dropped off until Noon on Friday, December 29th (but we would appreciate it if you can get them in a bit earlier).
Merry Christmas and Happy Holidays from everyone at Sonora Area Foundation and all the best in 2018!