There are countless benefits of charitable giving. Through generous donations, you can make a difference in your community and society. You may also feel happier and even save on your taxes. Here are some key things to need to know regarding charitable giving.
Types of Charitable Giving
Donor-Advised Funds: A donor-advised fund allows you to donate cash or securities, which are non-refundable to a non-profit organization.
Real Estate: If you have a property you no longer need, you can donate it to charity.
Cash: With a simple cash gift, you’ll receive a tax deduction that is equal to the amount of money you donated minus the value of any products or services you received in return.
Charitable Trusts: The two types of charitable trusts you may want to incorporate into your financial plan include charitable lead trusts (CLTs) and charitable remainder trusts (CRTs). Consult your legal professional and financial professional if you plan to include securities in your trust.
Tax Benefits of Charitable Giving
If you choose to itemize your taxes, charitable contributions can reduce your tax bill. It may be an excellent idea to itemize if the total of your deductions plus charitable gifts equals more than the standard deduction.
If you decide to give to a charity, ensure it’s a 501(c)(3) public charity or private foundation to receive tax benefits. Then, keep a receipt or another record of your contribution. At tax season, itemize your deductions (if appropriate to your situation) and file your tax return. Your tax professional can help you determine how charitable contributions will impact your tax situation.
The Impact of COVID-19 on Charitable Giving
Charitable giving was at an all-time high during the pandemic. Charitable Giving reached a record of $471 billion in 2020. Many Americans choose charitable giving as a way to help others during this unprecedented time. Since they couldn’t volunteer in-person at local charities, many donated their financial resources, despite the economic hardships they may have endured.
Consult Your Financial Professional
If you have any questions on charitable giving or how it may affect your financial situation, we’re here to help. Contact us today to learn more about how securities can help impact your giving ability.
The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.
All information is believed to be from reliable sources; however LPL Financial makes no representation as to its completeness or accuracy.
LPL Financial Representatives offer access to Trust Services through The Private Trust Company N.A., an affiliate of LPL Financial.
Content provider: Fresh Finance
LPL Tracking # 1-05182676