Reduce Your Tax Liability
10 Tips for Year-End Giving
by Linette Miller
Chair, Kinsley Community Foundation
In May of 2015, the Kinsley Community Foundation was created with an initial donation of $1000 from Kinsley PRIDE and a matching donation of $1000 from the Community Foundation of Southwest Kansas.
The Kinsley Community Foundation was formed as an affiliated fund of the Community Foundation of Southwest Kansas so that we can take advantage of the power of their considerable investing experience and strength.
The Foundation is a tax exempt public charity created by and for the people of Kinsley with the mission of building hometown philanthropy.
Since the Foundation is so new it is currently in a building phase, meaning it will need a base of donations to build the fund to a sustainable level so that it is generating enough to make it possible to make donations to area projects and organizations.
That being said, now is a great time for giving. When you make a donation by December 31 to the Community Foundation, you aren’t just giving money—you’re making a difference in our community. Here are 10 ways to make the most of your year-end giving.
- Talk to your advisor. Before making any significant gift to charity, consult with your CPA, attorney or other advisor to understand the impact on your taxes and estate.
- Consider your income. Take time to understand your tax liability for the year. Did your unearned income increase? Did you sell any appreciated assets? The answers to these questions may determine how much you want to give by December 31.
- Review your stocks. If you’d like to make a year-end charitable gift, consider giving appreciated stock. Selling stock will incur capital gains on the appreciation, but if you gift stock, you will receive a charitable deduction for the current market value of the stock—just as you would with a cash gift. Such gifts are deductible up to 30% of your adjusted gross income and you can carry the deduction forward for up to an additional five years.
- 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.
- Know the organizations you support. While there are many worthy causes, only donations to qualified 501(c)(3) organizations are tax-deductible. If you give through the Community Foundation, we will document the status of all nonprofits prior to making a gift on your behalf and can help you identify organizations that are qualified to receive your gift.
- Do you have more than enough? If you’re receiving taxable income from retirement plan assets or life insurance policies, there are a number of tax-advantaged ways to make these assets work for you and the causes you support. The Charitable IRA Rollover Act, for example, allows donors age 70 ½ or older to donate up to $100,000 from their IRA without counting the distribution as income.
- Explore employer gift matching programs. Many companies offer gift matching program that can increase –even double—the impact of your gift.
- Give now—decide later. If you are planning for a charitable tax deduction this year but are undecided about which nonprofits to support, consider opening a donor-advised fund at the Kinsley Community Foundation. You can claim a deduction for contribution 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.
- Create a giving plan. The Kinsley 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 Kinsley Community Foundation do the legwork. Working with the Kinsley Community Foundation gives you access to our extensive knowledge of the local community and the broad charitable needs of our region—so you can stay informed about the organizations you support and the effect your giving will have on the future of our community.
A six member Advisory Committee for the Kinsley Community Foundation has been formed consisting of Marty Gleason, Jon Herrmann, Jay Schroetlin, Amy Sollock, Lagayle Putter, and Linette Miller serving as Chair. For more information or to make a donation, please contact one of the Advisory Committee members or Linette Miller at 620-659-2711.