Disclaimer: The Jewish Community Foundation, Inc. does not provide legal, tax, or financial advice. Please consult with your estate, tax, or financial professional to determine the implications of your prospective gift.
As 2018 winds down, many individuals and families make a priority of giving charitably, to simultaneously perform tikkun olam ("healing the world") while also securing tax benefits before the year ends.
The Jewish Community Foundation, Inc. works closely with donors and their professional advisors to provide guidance during the process.
Here are some suggestions when considering year-end charitable donations, and the links in the blue box on the left also provide helpful tips from ousdie publications:
1. Give Appreciated Assets (Rather than Cash) to Save on Taxes
If you purchased any stock, bond, or mutual fund over a year ago and it has since appreciated in value, you can gift the assets to the JCF and avoid capital gains taxes, while also claiming the fair market value as an itemized deduction on your federal tax return (generally up to 50% of the donor's adjusted gross income). Just remember, you need to gift the appreciated asset directly to the JCF and not sell it first, and you need to complete the transaction by December 31st in order to qualify for an immediate income tax deduction in the current year.
To discuss this in more detail, please contact Seth Mirowitz, JCF Director of Philanthropy, today at 856-673-2521.
2. Open a Donor Advised Fund to Streamline Giving
A Donor Advised Fund (DAF) with the JCF enables you to contribute donations this year and earn tax benefits immediately, and then you can grant awards at any time in the future to virtually any IRS-qualified 501(c)(3) public charities. This gives you the flexibility to think strategically about how much and when to give to the charities of your choice, rather than having to rush and make a decision at year's end. In addition, your charitable dollars will be professionally invested and may grow over time, enabling you to give more in the future. A DAF can also be a great option to have charitable dollars available for natural disaster emergency relief or other unforeseen events.
A DAF provides numerous other benefits, and we are happy to discuss them in more detail. To learn more or to start your fund, please contact Seth Mirowitz today at 856-673-2521.
3. Initiate an IRA Charitable Rollover, Save on Taxes
If you are 70 1/2 or older, and you hold an IRA, you must make a required minimum distribution (RMD) every year. In some years, you may not need to take out money from the IRA for your everyday expenses, but you still must fulfill your RMD.
In this scenario, you may want to consider an IRA qualified charitable distribution (QCD, also commonly referred to as a charitable rollover) to benefit non-profit organizations such as the Jewish Federation of Southern New Jersey and its family of agencies.
By transferring up to $100,000 from your IRA to the Federation (or other charity) by December 31st, you can avoid taxes on the transfer by reducing your taxable income, and satisfy your RMD for the current year. You can also use this contribution to establish an endowment fund with the JCF. It's an easy and convenient way of making a meaningful gift.
To learn more, please contact Amy Clayman, Chief Financial Officer of the Jewish Federation, at 856-673-2522 today.
4. Don't Forget Your Estate Plans!
During this time of year, many individuals and families may be creating or revisiting their wills or estate plans, particularly in light of the 2017 tax reform that may impact your existing plans.
While updating your will or estate plans, we ask you to consider leaving a bequest to the JCF in any amount and creating a legacy for future generations. By doing so, the JCF will manage an endowment fund in your name, and will provide annual income to any chosen non-profit organization(s) that you choose, based on a percentage (usually 5%) of the value of the fund.
In lieu of leaving a bequest, you can also designate a percentage or fixed dollar amount of your 401(k), IRA, or life insurance policy to go towards your endowment fund. These are comparatively easy, convenient, and no-cost ways of creating a legacy.
Please contact Seth Mirowitz today at 856-673-2521 to learn more.
Questions about Your Year End Giving?
To discuss your year-end charitable giving plans, we encourage you to contact your professional advisor to start the process, and the JCF is happy to work with him/her to aid you in your planning, or feel free to contact the JCF directly at 856-673-2582.