Charitable giving is just one of many ways to reduce your taxes. It’s also a powerful vehicle to advance your values, help others and build a family legacy in the process.
Most people voluntarily contribute to their church and other favorite causes – yet don’t consider charitable giving when writing their will. It’s no longer just the domain of the superwealthy, but rather a vehicle for any individual, business or family that wants to lend support to a charitable organization of their choice and make a difference.
There are many donor-friendly options available including charitable trusts, charitable gift annuities, and yes – life insurance. There are even thoughts that Congress this year could likely permit direct contributions from qualified IRAs without incurring tax liabilities.
If managing your tax liability is a priority, giving away appreciated assets may be one of the best ways to lower your tax bill. For those who want ongoing and future family involvement, one option might be donor advised funds and notes.
These funds are managed by a third party and give individuals significant control over the placement and distribution of charitable gifts. Local community foundations are excellent resources on these specific types of funds, and can help explain the procedures, ramifications and benefits.
Charitable giving requires research, but a wealth of resources await – on the Internet, in bookstores, and through conversations with your financial consultant and tax advisers. Once you’ve got a plan in place, you can begin reaping the rewards.
Jim O’Neil is an investment executive with Dain Rauscher Inc., a member, NYSE and SIPC. These answers are for informational purposes only and should not be considered a recommendation to buy or sell any security. Send investment questions to Investor’s Forum, The Herald, P.O. Box 930, Everett, WA 98206, by fax at 425-339-3435, or via e-mail at economy@heraldnet.com.
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