Tax Laws Support Your Gift

One of the constants in our changing tax laws is the recognition of the vital role charitable organizations play in the building of strong communities.

For this reason, our tax laws continue to leverage every dollar given to a qualified charitable organization by providing a charitable income tax deduction. And while most Americans may be familiar with the terminology, it is easy to overlook the bottom-line impact of a simple gift.

In fact, when an individual or family chooses to write a check to charity, Uncle Sam actually picks up a portion of the amount given in the from of an income tax deduction. The illustration shows tax savings for cash gifts made by December 31.

Table of Charitable Deductions

          

Rate Gift Amount Savings 10% $1000 $100 15% $1000 150 25% $1000 $250 28% $1000 $280 33% $1000 $330 35% $1000 $350

 Other Ways to Leverage a Gift Today Giving an Appreciated Asset

If you have owned an asset like stocks or bonds (or in some cases, real estate) for more than one year and the asset has increased in value, a charitable] gift can minimize taxes and leverage the full value of the asset.

By transferring the asset directly to a qualified charity, you may deduct the full fair market value of the asset at the time of the gift.

Consider the example: Mrs. Sample purchased a block of stock for $1,000 several years ago. Today the stock is worth $2,500. If Mrs. Sample transfers the stock directly to charity, she will bypass the capital gains tax and receive a $2,500 tax deduction when she files her Form 1040 this year.

A Gift of insurance

Many donors find that a gift of a life insurance policy is a unique way to realize charitable goals. In order to qualify as a contribution, a charity must become the owner and beneficiary of the policy. You can check with your insurance agent about this as another way to benefit from charitable contributions.