A win-win for Interfaith and your taxes

Several supporters have asked how the recent change in tax laws will impact charitable giving to Interfaith Outreach. We hope the following information answers some of your questions.

Donating to Interfaith Outreach makes possible transformative change for struggling families in our community. It also gives donors a great sense of purpose and pride.

There are still opportunities for your charitable donation to be a win-win by saving on taxes as well. Here are three easy ways to donate that could have a positive impact on your annual taxes. Consult your financial advisor to see which is most beneficial to you:

Qualified Charitable Distribution

• If you are over age 70 ½ and have a traditional IRA, the IRS requires you take a distribution from your IRA each year.
• When transferring IRA dollars to a nonprofit organization, you don’t have to claim these dollars as income. Though not deductible, no taxes will be paid on these dollars. Also, because the amount is not included in income, it will not reduce your allowable medical deduction (7.5% of income).

Gifting Appreciated Stock

• Donations of stocks or bonds that are held in non-IRA accounts and that have increased in value over time provide a unique tax opportunity to the donor.
• Instead of paying capital gains tax on the appreciation of your investment you avoid this tax AND you get a tax deduction for the full market value of the appreciated stock that you donate to a nonprofit organization.

Donor-Advised Fund

• Creating a Donor Advised Fund enables you to consolidate your charitable giving into an independent account that can only be used for charitable contributions.
• Your Donor Advised Fund could be set up with as little as $2,500.
• Some Donor Advised Funds can also accept non-cash gifts such as real estate and other personal property.
• You receive a tax deduction in the year of, and the amount of, your contribution to the Fund.
• Donations may be made from the Fund at any time and to any number of nonprofit organizations. The money does not need to be distributed in the same year that you donate to the Fund.
• Your Donor Designated funds are invested and can grow tax free, thus increasing the amount you are able to give.

Many thanks to Ameriprise Financial Advisor Andy Gagnon for providing information used in this article.

Questions? Contact Andrea Fahrenkrug at afahrenkrug@iocp.org or 763-489-7512.