By Dan Davis
Once again, charitable organizations such as the Community Foundation of Jackson County, the Jackson County United Way, Child Care Network and others have much to be thankful for this holiday and Christmas season.
Among them are the many donors who help all of us make a difference in the lives of others all across Jackson County.
Many Americans find December a good time to make donations. They’re in a giving mood. It’s a good time to make those gifts that can earn deductions as tax time looms. And fortunately, that’s a bit easier this year since the U.S. Congress passed legislation last year that made the IRA charitable rollover permanent.
For several years, the IRA rollover was extended one year at a time, often not passing through the Congress until late December for the soon-to-be-ended year. That left donors and their financial advisors waiting and waiting before they could act.
With the rollover now enjoying a permanent status, donors don’t have to delay their gifts to charitable organizations until the very end of the year. Gone is the need to rush through a decision of where and how to make their annual gifts.
The Charitable IRA Rollover Act allows donors age 70½ or older to donate up to $100,000 from their IRA without counting the distribution as income. Donors interested in making an IRA rollover gift are encouraged to contact their financial advisor.
The Internal Revenue Service offers some tips for taxpayers to keep in mind when making charitable contributions. For example, a taxpayer must have a bank record or a written statement from the charity in order to deduct any donation of money, regardless of the amount.
Related to that, the foundation provides all donors with an acknowledgement letter outlining their name, gift amount and date of the gift along with providing confirmation that the donation was made to the foundation, which is a 501(c)3 organization. The foundation, by the way, also complies with Community Foundation National Standards.
Charitable contributions are deductible in the year they’re made. That means donations charged to a credit card before the end of 2016 count for 2016, even if the credit card bill isn’t paid until 2017, according to the IRS. Also, checks count for 2016 tax purposes as long as they are mailed in 2016.
Here are some other tips or thoughts on making your year-end giving to ensure that your gifts are making a difference here in Jackson County.
- Review your stocks and consider making a year-end gift of appreciated stock. A stock gift can result in a charitable deduction for the current market value, which could yield a savings in capital gains tax.
- If your financial circumstances dictate that you need a charitable tax deduction this year but are unsure which nonprofits to support, you may want to consider starting a donor-advised fund at the foundation. You can claim a deduction for contributions to your fund now even though distributions from the fund would be made in future years. Give me a call for more information, including the availability of matching dollars for newly endowed funds.
- Let us do the legwork. Working with the foundation gives you access to our extensive knowledge of the local nonprofit community and the needs of our county. We’re here to help you achieve your charitable goals. Our staff routinely does due diligence work to ensure that donors’ wishes can be met.
If you have questions about year-end giving, please give us a call here at the office or stop by. We’d be happy to talk with you.
Dan Davis is president and CEO of the Community Foundation of Jackson County, 107 Community Drive, Seymour, IN 47274. For information about donating to the foundation, call 812-523-4483 or send an email to firstname.lastname@example.org.