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A new year comes with change, including updates from the IRS to the standard deduction and charitable contribution limits. These changes are a not-so-subtle reminder from the IRS of how…
Read MoreThe Signatry has reached another major milestone in its growth: William “Bill” High, the Foundation’s founder and executive chairman, announced his retirement this week.
Read MoreIn November of 2022, The Signatry officially facilitated over $4 billion in grants since beginning in June 2000. This significant milestone...
Read MoreFor many families, the last three years have provided a rollercoaster of emotions, finances, schedules, and lifestyle. Throughout the same period, charities encountered new operational challenges and similar hardships. One thing remained strong throughout the first two years of the pandemic: the generosity of God’s people impacting ministries on a global scale. Therefore, how can we continue to maximize our impact through charitable contributions as we near the end of 2022? Looking Ahead Tax benefits for charitable contributions: Current tax law offers charitable deductions to donors who itemize taxes and contribute cash or appreciated non-cash assets held for more than a year. So, what is the charitable contribution limit in 2022? Donors may claim a tax deduction for non-cash asset gifts to qualified public charities and donor advised funds up to 30% of their adjusted gross income (AGI). For cash gifts, the charitable contribution tax deduction limit rises to 50% to 60% of one’s AGI, depending on other charitable giving. Donation amounts in excess of these limits may be carried over for up to five tax years. Giving More in 2022 There are a few main strategies to know as a donor seeking to maximize impact through charitable contributions with their current assets in 2022. Give appreciated non-cash assets instead of cash For those who itemize deductions, giving capital assets such as stock, cryptocurrency, real estate, or business interest to a donor advised fund may maximize your generosity and minimize taxes. Beyond claiming a deduction for the fair market value of an asset, donors can avoid the capital gains tax they would otherwise incur if they sold the asset and then donated the cash proceeds. This can mean even more going to charity and less to taxes, as shown in the example below. This example is only for illustrative purposes of a publicly traded appreciated stock gift. This scenario assumes a cost basis of $20,000, a fair market value of $50,000, ordinary income tax rate of 37%, and capital gains tax rate of 25%. Leverage deduction rules or a bunching strategy Bunch contributions. You may find that the total of your itemized deductions for 2022 will be slightly below the level of the standard deduction. You might find it beneficial to bunch 2022 and 2023 charitable contributions this year: itemize deductions on 2022 taxes, and take the standard deduction on 2023 taxes. In addition to achieving a large charitable impact now, this strategy could produce a larger deduction in the first year than two separate years of itemized deductions, depending on your contribution amounts and filing status. With a donor advised fund, you can recommend a schedule of gifts to go out across the two years and add any additional amounts from the itemized 2022 return as bonus gifts to charities. Stocks and Charitable Giving Appreciated stocks donated to a DAF before they are sold do not affect the donor’s capital gains taxes. Donating appreciated stocks before they sell is another strategy to minimize tax burden and maximize generosity. Learn more here Consider Retirement Assets Make a Qualified Charitable Distribution (QCD) of IRA assets. Individuals age 70½ and older can direct up to $100,000 per year, tax-free, from their Individual Retirement Accounts (IRAs) to operating charities through qualified charitable distributions (QCDs). By reducing your IRA balance, a QCD may also reduce your required minimum distribution (RMD) in future years, lower your taxable estate, and limit your beneficiaries’ tax liability. A donor advised fund is not an eligible recipient of a QCD—a distribution from your IRA to a DAF will not be tax-free. The Signatry offers other giving methods that may receive a QCD, including designated funds. Grants from a designated fund can only be sent to a single charity. Learn more here. What Can You Do Next to Maximize your Impact? The Signatry has resources and information online to help guide your charitable contributions strategy and generosity journey: Create a family mission statement Invest in alignment with your goals and passions Bring your advisor into your generosity journey Become a Cause Champion giver For insights specific to the strategies discussed in this article, donors are invited to review these articles: Donating a complex, non-cash asset Bunching charitable contributions Making Qualified Charitable Distributions (QCDs) If you are contemplating any of the strategies highlighted above, consult with your tax, financial, and legal advisors. Donors and advisors can also call us at 913-310-0279 for more information and to set up a meeting.
Read MoreThere are only a few months left of 2022, which means it’s time to start thinking about one of life’s greatest certainties: taxes. Using a donor advised fund (DAF) can make it easier to itemize your charitable deductions –
Read MoreWe recently got to ask Trace Thurlby and his team at the Global Orphan Project a few questions about how modern Christians can best care for orphans and vulnerable children…
Read MoreIllumiNations envisions that by 2033, 95 percent of the world’s population will have access to a full Bible, 99.96 percent will have access to a New Testament and 100 percent of the world’s population will have access to at least some portion of Scripture. In the world’s most strategic 100 written languages, at least two viable Bible translations will be available.
Read MoreThe last few decades of charitable giving have been driven in large part by donors in the Baby Boomer generation and older, with Gen X donors becoming bigger players in…
Read MoreAs the fastest growing vehicle in charitable giving, donor advised funds (DAFs) have become a major part of the philanthropic landscape in America1. There are numerous features that have contributed…
Read MoreWhere will charitable giving go in 2021? It is a critical question. Why? In recent years, total charitable giving has run in the $400 billion range. The nonprofit sector contributes…
Read MoreThere is so much to celebrate throughout God’s Kingdom in 2020 and great anticipation for what we can accomplish this upcoming year. I think of two proverbs that can help…
Read MoreThe Too Early Predictions for 2020 Charitable Giving: What We Know Now and Where it May Go Buildings closed. Events canceled. Shelter in place is part our language now. With…
Read MoreDonor advised funds are making the news. An October 3, 2018, Bloomberg article chronicles their rise. More than half of the top ten charities in the country are donor advised…
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