Charitable contributions are a powerful tool for making positive changes in the world. For highly compensated individuals and business owners, the benefits of your financial donations can extend even further.
Tax laws provide the opportunity for you to reduce your tax burden by making qualified donations. In many cases, the more you give, the better it is for your financial health.
If you aren’t already putting your money to its best use helping others, perhaps these reasons will help change your mind.
No. 1: Charitable Monetary Contributions Are More Important than Ever
Recent changes to the tax laws raised the financial benefit threshold for charitable giving for cash contributions. Because it’s become harder to financially benefit from giving, fewer taxpayers are making donations this year. And that’s bad news for those with the greatest needs.
Choosing the causes that mean the most to you will make your gifts even more meaningful. Knowing that you’re making a difference can provide intangible personal benefits that stick around long after the tax advantages.
No. 2: You Can Preserve Your Assets While Making Charitable Contributions
Charitable donations are best when made for altruistic reasons — and you always have the option of not claiming your contributions on your taxes. However, the tax advantages you can achieve from charitable giving are significant — significant enough, in fact, that it may encourage you to give more than ever.
One of the ways to maximize the impact of your contributions is through a donor-advised fund. A donor-advised fund allows you to take a tax deduction the same year as you give to the fund. You then pick the charitable groups or organizations that you want your donation to benefit in the future.
Your tax attorney can help you explore this and other options to determine what is right for you.
No. 3: You Can Contribute Assets as Charitable Donations
Your charitable acts are not limited to purely financial donations.
Besides cash, did you know that you also have the option of donating other appreciated assets? In fact, you can donate assets ranging from real property and stocks to artwork and collectibles as non-cash, charitable contributions.
For high net-worth individuals, this can be an effective way to make a positive difference in the world while also reaping the financial benefits. If you can help a cause you’re passionate about while mitigating your tax burden, you may want to give as freely as you can.
The tax lawyers at Cantley Dietrich understand the importance of balancing philanthropy with sound asset protection strategies. Fortunately, these priorities are not at odds with one another — just the opposite, in fact.
We are able to discuss a variety of charitable giving strategies that provide philanthropic benefits as well as potentially significant financial advantages. Contact us today to learn more about how you can incorporate charitable contributions into your asset management and estate-planning strategies.
NOTE: This article is for informational purposes only and should not be construed as providing legal advice. Use of this site does not create an attorney-client relationship. Contact an attorney to obtain legal advice.