We’ve all heard of Black Friday and Cyber Monday, but do you know about Giving Tuesday?
Now in its fourth year, Giving Tuesday – or on social media, #GivingTuesday – is a global day dedicated to giving back. And it’s today.
So we thought this would be the perfect day to discuss donating to charity. It’s a great way to give back and to obtain tax savings.
Charitable donations remain one of the most powerful tax-saving tools because you are in complete control of how much to give and when you want to give.
Depending on the type of recipient (public charity or private foundation), annual deductions are limited to 20%, 30% or 50% of a taxpayer’s adjusted gross income, and is dependent on what is donated (cash or property).
If you have appreciated stock or mutual fund shares that you have owned for more than one year, consider donating them instead of cash as you can generally claim a charitable deduction for the full market value at the time of the donation while avoiding capital gains tax on those gains.
If you own stocks that are in a loss position, do not donate them to a charity. Instead, consider selling the stock and give the cash proceeds to a charity. That way, you can generally deduct the full amount of the cash donation while keeping the tax-saving capital loss for yourself.
Check out our prior year end tax tips, and look for more in the coming days and weeks. Check back here regularly for more tips - or call us for custom advice for your business or personal tax returns.
