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Maximize Your Charitable Impact by Nick Dietzen

NICK DIETZEN | March 4, 2021

Tax preparation may not be the easiest task for most people. Whether you prepare and file your taxes yourself or work with a tax professional, each spring many of us find ourselves scrambling to locate receipts, retrieve documents, and do some last minute tax research. Is this sounding familiar?

Why not skip the stress and take a proactive approach? Every tax season offers the potential to reset and truly prepare for the financial year ahead. While we are now several years into the most recent federal tax changes, many donors are surprised to find out that not all of their charitable contributions are yielding tax benefits.

Below are the thresholds for the federal standard deduction. If you do not have deductions (charitable and other qualified deductions) exceeding these amounts, then your gifts may not have a tax consequence.

*Important Note: taxes at the state level vary and regardless of your federal filing status, your charitable gifts may be deductible on your state taxes even if they are not realized on your federal filing.

We understand that while tax implications might not be the sole or even primary reason for giving, tax benefits can inform giving – the amount, the types of property, and the time horizon for giving might change based on any number of factors.

With that in mind, let’s look at a few ways that charitable preparation can maximize your charitable impact and set you up for fewer surprises next tax season.

For illustrative purposes, the standard deduction is a helpful marker for exploring two charitable gifting strategies:

Near the Borderline of the Standard Deduction:

 

Annually Using Standard Deduction:

These examples and scenarios are for illustrative purposes and consulting a professional is advisable, given that any and all individual factors will contribute to tax planning. We hope that your spring is filled with good health, happiness and comfort in knowing a little bit of preparation can make this time next year all the more enjoyable!

Wishing you good health,

Nick Dietzen, Major Gifts Officer

To learn more, contact Nick at NDietzen@SBFoundation.org or (805) 880-9352.

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