By Jane Browning, Executive Director of Hot Springs Village Community Foundation
Does March Madness really refer to basketball, or is it all about tax season? Changing rules, changing circumstances, emerging priorities all vie for our attention at this time of year. We clearly need professional help in sorting through our financial matters to come out on top of this year’s filing season.
Fortunately, Hot Springs Village is blessed with a plethora of great professional talent in the way of accounting firms, estate lawyers, financial advisors and planners. We also have Hot Springs Village Community Foundation with its experience in philanthropic giving and planning. We are one of 29 affiliates in the state with direct access to a team of seasoned professionals with deep knowledge of the nonprofit landscape.
Arkansas Community Foundation offers tax-wise ways to give. Consider these opportunities for smart charitable giving:
Charitable Bunching. Combine multiple years of charitable contributions in one calendar year in order to exceed the standard deduction in that year and receive maximum tax benefits for those donations. Donors can use a charitable fund, such as a Donor Advised Fund, to bunch or “stack” donations in a single year. Gifts to charitable funds are tax-deductible and the assets can be invested, so charitable dollars grow tax-free. Donors can use those assets to provide ongoing support for their favorite nonprofits, even in the years they claim the standard deduction.
IRA Qualified Charitable Distributions. Utilize a retirement account to make charitable donations. A Qualified Charitable Distribution (QCD) allows traditional IRA account owners age 70 1/2+ to direct up to $105,000 each year to qualified charities without treating the distribution as taxable income. A QCD is particularly smart for those who take the standard deduction and would miss out on writing off charitable contributions. And an IRA owner of age 73+ can offset the tax consequences of their Required Minimum Distribution (RMD) by using it for a QCD.
Highly Appreciated Assets. Translate earnings into community impact by donating stock or another appreciated asset. Instead of selling, donors receive a tax deduction based on the stock’s full market value and avoid capital gains taxes. The gift can then be used to benefit the causes and organizations they care about most.
For more information about how March can be a little less mad, feel free to contact one of the Foundation’s philanthropic advisors by calling 501-372-1116.