Ready or not. . . it’s here. . .the most wonderful time of year!

The Celebration of the Birth of Our Savior – few things compare. We wish you a season of wonderful memories and special times with those you love.

Of course, there is a fair amount of busyness that comes along with this time of year. Christmas gatherings, meal preparations, gift exchanging, card sending, and the list goes on. Usually somewhere at the bottom of the list we have the task of year-end tax planning. There is no way to avoid it – the end of the year will come on December 31st whether we are ready for it or not. So take the opportunity while there’s still time, to positively impact your 2015 income taxes.

7 Surprising Opportunities for Year-End Tax Savings

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Give Now, Deduct Now, Distribute Later

Often people come to us because they’ve received a big bonus, sold an asset, received an inheritance, or received a chunk of money.  They want to give but they aren’t sure where.  Solution: they can open a giving fund, and make the gift now into the giving fund to receive the deduction. Then they can give to a charity from their fund later when they have time. Click here for the video.

Give Stock Instead of Cash

If you are writing a check for charitable contributions that is above $10,000, chances are you should consider talking to your broker about giving stock instead. A gift of publicly traded stock allows an individual to donate at fair market value and avoid the capital gains tax and it also allows your advisor to rebalance your portfolio.  Generally, this approach allows for a 35% increase in giving. Click here for the concept sheet.

Give Stuff in Addition to Cash

90% of our wealth is in our stuff. If you feel maxed out in your cash giving, the solution may be to give non-cash assets. This can include things like cars, trucks, boats, electronics, collectibles, precious metals, and even artwork.  In many cases, we see people increase their giving by using assets they were going to sell or give anyway.  If you want to give directly to a charity, consider www.idonatefoundation.com.

Real Estate Giving Works Too

It’s often overlooked, but real estate is a great gift:  residential houses, commercial lots, farm ground, etc.  The best part about giving real estate is that partial gifts are possible too.  You can donate at fair market value and avoid capital gains with this kind of gift.  Real Estate gifts work best when the value is $50,000 and up with no debt.

Business Sales Represent the Greatest Savings

Many business owners wait until year-end to complete the sale of their business. The business sale represents the greatest opportunity to maximize giving while minimizing tax.  Like publicly traded stock, a portion of the business can be donated prior to the sale at fair market value, and capital gains tax avoided.  Even if the sale doesn’t go through, the deduction is still good against ordinary income. For more information, check out this 2 minute video.

December 31 is a Real Deadline

The giving season ends December 31.  At a minimum, the gift must be received or postmarked by December 31.  Each year, we have the procrastinating few who call us wondering if we can backdate the gift.  Unfortunately, the answer is no.

Not Everything is About A Deduction

While our focus has been on tax savings, I like to remind people that not everything is about a deduction.  I like to encourage random generosity.  Have fun with your giving.  Need a few ideas on random generosity? Read this post. 

 

Post contributed by Connie Hoagland,
Vice President, Ministry Services,
National Christian Foundation.

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