Year-End Giving Tips

The Tax Cuts and Jobs Act of 2017 can significantly impact a taxpayer’s status and method of preparing to file taxes. Here are a few ways to take advantage of its provisions to potentially lower your tax bill through charitable giving.
 

• Making charitable gifts to Nativity Church or School from your IRA as a Qualified Charitable Distribution
  • If you are 70.5 years old and have a traditional IRA, you are likely required to take a Required Minimum Distribution (RMD) each year, and that distribution is fully taxable. However, did you know that you can direct your RMD from your IRA to the charities of your choice and pay zero tax on the distribution? If you are taking funds from your IRA and also making charitable donations in the same year, making Qualified Charitable Distributions to a favorite charity is tax-free.

• Bunching contributions into a Donor Advised Fund for later gifting
  • If you no longer itemize deductions, you may not be able to use your charitable deductions to lower your taxes. Many donors are “bundling” a few years’ worth of their charitable giving into a Donor Advised Fund (DAF).  The full tax deduction is available for the entire amount placed in a DAF in a single year. The donor can then make annual distributions to charities over many years on their own schedule from the DAF. This allows for a large amount to be itemized in a single year while providing many years of future charitable distributions. An added benefit is that the fund balance grows tax-free each year, so you have even more to give to Nativity Church, Nativity School, or other charities of your choosing.

 
Finally, always talk to your talk advisor for advice on the tax benefits of your personal charitable giving.  And please remember Nativity Church and School in your year-end giving.

If you plan to make a gift through your broker, please contact Laura Barr, Nativity business administrator, for directions or assistance at lbarr@nativity-mn.org.

Or, consider making a gift or setting up a periodic electronic fund transfer here.
 
Thank you for your generosity to Nativity of Our Lord.

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A version of this article originally appeared in the December 2, 2018 bulletin.