Charity, like any business that involves spending money, has several peculiarities. You can learn how to sacrifice so that you can continue to benefit society at the same time, but at the same time not harm yourself and your wallet with an illiterate strategy.
The financial and economic crisis in the country does not prevent Americans from donating to charity, and incorrectly chosen financial strategists can greatly increase the tax deduction.
It is reported that from the point of view of saving on taxation, it is more appropriate and effective to donate assets from brokerage accounts, rather than cash since this is the strategy that avoids tax oppression.
We must not forget about the existence of funds funded by donors themselves, since the strategy of using them for donations is also very effective since in this case direct transfers to charity are debited from your retirement account.
If you are over 70.5 years old, you should also learn more about QCD, which is qualified charity distribution. This is 100 thousand dollars that you put on your IRA before they are covered by taxes, and after you are 72 years old, you will be able to donate this money, since the minimum requirements for the production of these operations will already be reached.
It is not necessary to deal with the distribution of your charitable assets on your own, since it is possible to transfer your future savings in advance to a distributed fund and request write-offs when it is convenient for you. This system somewhat resembles a checkbook. It is much easier to keep all your assets in one place than to transfer them from account to account and from fund to fund.
In the current 2022, the average tax deduction for charity is $12,950 for single philanthropists and $25,950 for married couples jointly applying for donations, and there will also be tax benefits for charity.
Combining all assets in one place, transferring them to funds supported by donors, and choosing different areas of charitable activity can not only help control money but also simplify the process of transferring money to charity in principle, almost completely removing responsibility for this process from you.
Main Sources: https://www.cnbc.com/2022/09/30/heres-how-to-pick-the-best-charitable-giving-strategy.html
