Year-end is an ideal time to think about the kind of impact you’d like to make in the coming year. On top of parties, gift exchanging and resolution making, it is also the end of the tax year – the deadline for charitable giving in order to receive a tax deduction. Tax deductions are important for the donor and nonprofit alike: the nonprofit receives more of the donation since it’s not taxed, and the donor reduces his or her taxable income.
Fortunately, there are valuable things you can do to design a smart, strategic plan for year-end gift planning. The Community Foundation of Southern Maryland is here to provide effective strategies and solutions as the year comes to a close.
- Do your homework and research the charity . . . Are they a qualified tax exempt organization? If you are not sure, call the Community Foundation and we will do the research for you.
- If you are planning for a charitable tax deduction in 2015 but are undecided about which nonprofits to support, consider opening a Donor-Advised Fund at the Community Foundation. You can claim a deduction for contributions to your fund now even though distributions from the fund might be made in future years. A donor-advised fund can be set up in one meeting.
- Use appreciated securities which enables you the donor to be eligible for an immediate income tax deduction based on the asset’s fair market value on the date of the gift. It also enables donors to avoid paying capital gains tax on the appreciation in value of the shares given.
- Consider setting up an estate plan now as another way to receive tax benefits. Planning ahead of time allows you to strategically give to charities that matter most to you.
- Give early and complete your gift by December 31. A gift by check is complete when mailed (postmarked) to the charitable recipient, even if not cashed until the following year. Gifts by credit card are complete when your credit card account is charged. Gifts of stock and real estate are more complex; don’t wait until late December to make these gifts as it may be too late to make the necessary arrangements.
- Create a giving plan. The Community Foundation can help you create a giving plan to help you think strategically about how you give and to what organizations. This ensures that your donations make the greatest impact on the causes you care about while maximizing tax advantages.
Let the Community Foundation do the legwork. At the Community Foundation of Southern Maryland, creating legacies are what we do best. We are a publicly supported, 501 (c) (3) tax exempt nonprofit organization whose mission is to accept contributions and bequests for all types of funds including endowments, scholarships and donor advised funds from individuals, corporations, other nonprofits or private foundations wishing to maximize their contributions, establish a legacy for themselves or their loved ones while making a lasting impact for the community. As you look for meaning in your lives, a Fund at the Community Foundation will allow you to establish a legacy that will last beyond your lifetime. One donation, establishes one named legacy fund that supports many different nonprofits and causes. Give wisely and include a legacy that benefits southern Maryland through the Community Foundation of Southern Maryland.