The end of the year is a good time to review important financial matters, including one’s charitable gift commitments. For many people this will be especially true in 2011. Careful planning today can help you balance your personal and philanthropic goals for the remainder of the year and beyond. Now may be an opportune time to examine the amount and timing of your gifts in order to maximize your tax savings this year. Your charitable deductions are one of the few tax-saving opportunities that are totally within your control. By carefully planning your charitable gifts and completing them by December 31, you may find you can even further reduce the amount of tax you owe next April.
The most common forms of tax deductible contributions include:
- Cash: Charitable gifts are most often made in the form of cash and checks. If you itemize your tax deductions, gifts of cash can serve to eliminate tax on up to 50% of your adjusted gross income (AGI).
- Appreciated Property:Giving securities (individual stocks, bonds, and/or mutual funds) and certain types of property that have increased in value can bring extra tax savings. Such gifts provide multiple tax benefits. Not only are they generally deductible from income tax at full fair market value if owned for longer than one year, giving in this way also enables you to bypass capital gains tax that would otherwise be due if the donated assets were sold. Gifts of such assets are deductible in amounts of to 30% of AGI.If you believe a security will continue to increase in value, you may wish to donate it and use the cash you might have used to make your gift to instead repurchase the same investment. In so doing, you continue to own the same security, but you enjoy a new, higher cost basis. As a result, you could have less gain to report on a future sale at a higher value. You may also benefit from deducting losses should the security decline in value in the future.
- Depreciated Property: If you own an investment that has decreased in value since you have owned it, consider selling it and making a charitable gift of all or a portion of the cash proceeds. In addition to an income tax deduction for the cash contribution, this creates a loss you may be able to deduct from other taxable income. the combined amount of the deductible loss and the charitable deduction could actually total more than the current value of the investment.
Whether you make your gift in the form of cash or other property, deductions may reduce your taxes in as many as six years. Your financial services provider can furnish you with additional information and the forms necessary to complete your gift in a timely and tax efficient manner.
For more information on the tax advantages of a particular donation, always contact your financial advisor.
Timing is Critical
As you plan your end of year giving, keep in mind that in order to receive tax credit for the current calendar year, the date you deliver or mail your donation is generally recognized as the gift date. Credit card gifts must be processed by December 31, 2011 to receive credit for the current calendar year. Although Archbishop Hannan will be closed for Christmas Break, December 20 through January 2, the Development staff will be checking the mail and messages regularly. If you wish to deliver an end of year contribution during the Christmas break, please contact our Development Director, Mrs Sandra Martin, at (985) 630-1960.
Do Not Forget Your Employer’s Matching Gift Program
Many employers match the gift their employees make to Archbishop Hannan High School. Please check with your employer to see if your company has a charitable contribution matching gifts program. If so, your gift may be doubled or tripled simply by completing a form available from your employer. For more information on matching gifts, please click here.
Archbishop Hannan High School (our legal title) is a 501(c)3 not-for-profit tax-exempt institution and enjoys the benefits of Federal tax deductions offered to private philanthropic donors.
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