Skip to main content

Why Tax Time is the Right Time to Plan Your 2020 Charitable Giving

six tips to CONSIDER AS YOU THINK ABOUT TAXES

With the deadline to file your 2019 federal tax return extended to July 15, tax season is still upon us.

What you may not know is that your charitable giving choices this year can affect how much you owe the IRS or will see in tax refunds in 2021.

If you didn’t consider how charitable donations could impact your 2019 tax returns, now is the perfect time to start thinking about your 2020 charitable giving plan.

Here are six tips to get you started:

  1. Ask your tax attorney, wealth manager or financial advisor to explain the benefits of charitable giving as it relates to your financial situation.

  2. While giving may have benefits from a tax perspective, your underlying motivations to give likely run deeper. Make a list of causes you care about; this will help guide you in creating a more meaningful giving plan.

  3. If you are already donating cash, ask your tax advisor whether making gifts through publicly traded securities, like stocks, bonds and mutual funds, could reduce your taxes.

  4. If you made donations last year but didn’t qualify for an itemized deduction, consider bundling your gifts, also known as gift bunching. The 2017 tax law increased the threshold amount necessary to itemize charitable deductions. Bundling gifts allows you to stack several years of giving into one year, increasing the likelihood of qualifying for itemized deductions.

    For example, opening a donor advised fund allows you to organize your giving into one year for tax purposes, then distribute that money to charity over multiple years.

  5. If you are 70-and-a-half years old or older, you may consider taking advantage of the Qualified Charitable Distribution, or charitable rollover, from your Individual Retirement Account (IRA). Taxpayers in this age group may transfer up to $100,000 annually from their IRAs directly to charity without being subject to income tax on that transfer.

    Once you turn 72, and are subject to a Required Minimum Distribution (RMD) from your IRA, charitable rollovers may help you avoid income taxes on those distributions.

  6. Use your local community foundation, like the Saint Paul & Minnesota Foundation, as a resource and giving partner.

Our gift planners will chat on the phone with you and your professional advisor to help explore giving options. We are experts in our community’s needs and giving landscape — focusing on relationships, not just transactions — and will work with individuals, couples or families.

    More Stories

    Watch Changing the Narratives of Black, Indigenous & People of Color Through Art

    Changing the Narratives of Black, Indigenous & People of Color Through Art

    The Twin Cities Theatres of Color Coalition discusses the role performing arts plays in social change.

    Watch the video
    Read A Donor's Generosity Helps Many Recognize Their Potential

    Donor Q&A: Ray

    A lifelong volunteer and community mentor shares his philosophy on the importance of giving.

    Read his story
    Read Using Stock to Support Your Favorite Charities

    Using Stock to Support Your Favorite Charities

    Did you know that you can donate stock as a way to grow your fund and support your favorite nonprofit organizations?

    Learn More
    Read How Caroline and Aurea Learn From Each Other

    How Caroline and Aurea Learn From Each Other

    A beautiful relationship between a donor advised fundholder and her advisor is the gift that keeps on giving.

    Watch the video
    Read Planning Your Giving in Uncertain Times

    Planning Your Giving in Uncertain Times

    Here are two giving techniques you can use to support the causes you care about.

    Learn More
    Read Donor Q&A: Jim Hansen

    Donor Q&A: Jim Hansen

    This local business leader lives out lessons of hard work, generosity and volunteerism.

    Read his story
    Read Golden Contributions

    Golden Contributions

    Donors David and Janet support essential community needs in response to COVID-19.

    Read their story
    Read The CARES Act and Charitable Giving

    The CARES Act and Charitable Giving

    The CARES Act includes three specific provisions that relate to charitable giving and offer nonprofits unique fundraising opportunities.

    Learn More

    COMMUNITY IS OUR COMPASS

    JOIN
    US!

    * Indicates a required field