Establishing donor-advised funds will allow members of the Alexis de Tocqueville Society to lower their tax bill while maximizing charitable contributions, says Tocqueville member Jana Shoulders.Shoulders is Managing Partner of Mariner Wealth Advisors in Tulsa.
Donor-advised funds are becoming increasingly popular methods of giving to charity and often result in significant tax savings and larger contributions to the non-profit organization, Shoulders said.
Donor-advised funds may be established through the Tulsa Community Foundation or your financial adviser.
In addition, Tocqueville members may give multi-year gifts, which also can result in a significant tax savings by “bunching” deductions into one year.
Further savings can be realized by gifting appreciated shares of stock to avoid paying capital gains tax, she said.
HOW IT WORKS
If an individual or couple contributes $15,000 in one year, they would qualify for $25,000 in federal income tax deductions (the $15,000 gift plus the deduction allowed for state and local property taxes of up to $10,000.) If they repeat that gift for a second year in a row, total deductions over a two-year period would be $50,000.
However, if they contribute $30,000 to a donor-advised fund, they would take an immediate deduction of $40,000 (the $30,000 gift plus the $10,000 deduction allowed for state and local property taxes.) “The $30,000 could remain in the donor-advised fund or could be contributed to the Alexis de Tocqueville Society for a two-year membership,” Shoulders said.
In the second year, since they would then only have the state and local property tax deduction, they instead would take the new standard deduction of $24,000, for a total of $64,000 in deductions over two years, as compared to a deduction of $50,000 if they would have merely given two gifts of $15,000 spread over two years, for a net savings of $14,000.
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