The following is a reprint of the JCF's Money Matters column, published in the October 30, 2024 issue of the Jewish Community Voice, titled, "Do's and 'Don'ts to keep in mind for year-end charitable giving":
Giving charitably increases at year-end for many donors. To help you with your philanthropy, here are some “Do’s” and “Don’ts” to keep in mind:
DO: Donate appreciated assets instead of cash.
When you donate stocks, mutual funds, or other assets that you have held for more than one year and have grown in value, you avoid paying capital gains taxes, and you can earn a tax deduction on the fair market value of the asset gift if you itemize.
DON’T: Wait until the last minute!
To ensure you receive 2024 tax benefits for your charitable giving, initiate your gifts well before December 31. Some gifts may take time to process, and if your donation is received by the charity after 12/31, it will legally have to count toward the 2025 tax year (exception: A mailed check that is postmarked prior to January 1 can count for 2024).
DO: Open a donor advised fund (DAF) with the JCF to streamline your giving.
A DAF is essentially your own personal charitable giving account that you can access online anytime. When you contribute to your DAF, you earn immediate tax benefits, and then you can recommend grants ($100 minimum) to your preferred charities at any future time. The JCF vets each charity, processes the checks, and maintains your giving history. Learn more: jcfsnj.org/daf
DON’T: Leave out charitable giving when updating your year-end estate, financial, or tax plans.
Leaving a legacy gift can be easy to do and cost you nothing during your lifetime. Please consider including a charity in your life insurance policy or individual retirement arrangement (IRA) beneficiary designations or by leaving a gift (bequest) in your will. Plus, when leaving a legacy gift to the JCF or any local Jewish organization participating in the Life & Legacy initiative, your gift can help grow an endowment fund to provide vital annual income to your selected charity(-ies) for future generations.
DO: Bunch multiple years of donations into one year to maximize itemized and standard deductions.
The current standard tax deduction is $14,600 for individuals; $21,900 for heads of households; and $29,200 for couples filing jointly. By frontloading your charitable giving for multiple years into your DAF this year, you can itemize your 2024 deductions and earn tax benefits on the dollar amount that exceeds the standard deduction. Then, you would take the standard deduction in the following year(s) while your tzedakah dollars are professionally invested in your DAF, allowing it to potentially grow, tax-free.
DON’T: Forget to consult with your trusted professional advisor.
The JCF (like most charities) cannot provide estate, financial, or tax advice. However, we are happy to work with you and your advisor to accomplish your philanthropic goals.
DO: Initiate a qualified charitable distribution (QCD) from your IRA.
If you own an IRA and are 70 1/2 years young or up, you can transfer up to $100,000 to charity tax-free each year. Plus, if you are at least 73 years young, the QCD counts toward your required minimum distribution (RMD) for the year. By directing your IRA check to a charity, the distribution is tax-free. This is a wonderful option to support the Jewish community today as well as tomorrow, if you contribute to an endowment fund with the JCF. Note: QCDs cannot go to DAFs.
DON’T: Gain any tangible value for your donation.
When you give charitably, you cannot receive something in return and be able to claim that as tax deductible. Examples: Auction items or raffle tickets.
DO: Enjoy your charitable giving!
Tzedakah should be a memorable experience that results in a “giver’s high.”
Thank you for your generosity!
For questions about charitable giving, please contact JCF Executive Director David Snyder at 856-673-2571 or dsnyder@jfedsnj.org.
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