2024 Year-End Charitable Giving and Tax-Wise Planning Tips

As we approach the end of 2024, The Foundation of the Greater Miami Jewish Federation has some key year-end charitable giving strategies.

Here are four tax-wise tips to consider:

• Gift Appreciated Assets: Charitable gifts of appreciated assets remain a best practice and with the rise in stock market values over the last 12 to 18 months, you may have experienced significant growth in your investment portfolio. Such gifts can provide you with a deduction for the full current value of the asset but also avoid the capital gains tax that would apply if you sold the assets yourself rather than gifted them.
• Donate to a Donor-Advised Fund (DAF): If you are considering making a significant donation to charity over time or want the ability to plan your charitable grants over several years, consider opening a DAF or adding funds to an existing DAF through The Foundation. Funding your DAF with appreciated assets can be especially beneficial as you avoid any capital gains liability. The Foundation can accept appreciated assets, including publicly traded stock, as well as other types of non-cash assets, such as life insurance, privately held business interests, real estate or certain collectibles.
• “Bunching” Charitable Gifts Can Magnify Tax Benefits: Combining the above two strategies can enhance your tax savings by “bunching” two or more years of contributions this year. The larger contribution can create a bigger tax benefit this year and create a fund from which distributions can be made over several years to satisfy your anticipated charitable giving. This approach is especially helpful for donors who might not otherwise be eligible to itemize their deductions. Only taxpayers who itemize their deductions get a tax benefit from a charitable gift. By bunching into a DAF this year, you can increase the total amount of deduction to a level where it may be more advantageous to itemize than to rely on a standard deduction.
• Utilize the IRA Charitable Rollover: If you or your spouse are over age 70½, the IRA Charitable Rollover is an attractive option that permits you to transfer up to $105,000 this year (the amount is indexed for inflation) from each of your individual retirement accounts directly to a charity, free of any income tax. In addition, such rollovers help satisfy the IRA Required Minimum Distribution (RMD) if you’ve reached the age where such distributions must be taken into income (generally when you reach age 73). The rollover also removes these retirement assets from any potential estate tax exposure.

For more information, contact Scott Kaplan, Foundation Director, at [email protected] or 786.866.8623 to discuss these and other charitable giving strategies. As with any tax and charitable planning, it is recommended that you carefully consider potential changes in the context of your complete financial portfolio and consult with your tax and financial advisors.