Tax Strategies and Charitable Giving For High-Net-Worth Individuals and Families
August 31, 2023
Finding ways to optimize your financial health while also making a positive impact on the world can be a challenging endeavor. One powerful avenue that intersects both goals is charitable giving. Not only does charitable giving allow you to support causes you care about, but it can also offer substantial tax benefits when combined with the right strategies. Effective tax strategies for charitable giving include distributions from an IRA, charitable remainder trust (CRT), donor-advised funds (DAFs), and private foundations. Distributions from an IRA: A Tax-Efficient Giving Strategy Individual Retirement Accounts (IRAs) are popular vehicles for retirement savings, but they can also play a significant role in your charitable giving strategy. For those aged 70½ or older, a qualified charitable distribution (QCD) allows you to directly transfer up to $100,000 annually from your IRA to a qualified charity. This distribution is not included in your taxable income, which can provide a double benefit: reducing your taxable income and supporting a cause you care about. Charitable Remainder Trust: Balancing Income and Giving A Charitable Remainder Trust (CRT) is a versatile tool that enables you to support a charitable cause while generating income for yourself or your beneficiaries. Here’s how it works: you […]
