Charitable Giving Tax Strategy - Bunching Charitable Donations

Amy Jordan |
Categories
Finance
Philanthropy

 

Bunching Donations in Donor Advised Funds

Donor-Advised Funds (DAFs) can be used to bunch multiple years’ worth of charitable donations in a single year to receive maximum tax benefits. Gifts to DAFs are tax-deductible. You can itemize deductions when opening a DAF and claim the Standard Deduction the other years. Combine two or three years of charitable contributions in one calendar year to exceed the standard deduction in that year, then use the assets in the DAF to support your favorite charities, even in years when you take the standard deduction.

Below is an example of a married couple, filing jointly, who typically gives $5,000 a year to charity can benefit from bunching their charitable contributions into $15,000 donation every three years. In this example, the couple itemizes in years one and four and takes the standard deduction in years two, three, five and six.

Hudson Community Foundation Donor Advised Fund program is a simple, flexible, and tax-wise way to manage your charitable giving.

Gift now and decide later where to donate to charities anywhere in the nation.

To learn more, contact us at info@myhcf.org or (330) 655-3580

*This content is developed from sources believed to be providing accurate information. The information provided is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any Federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel. Individuals involved in the estate planning process should work with an estate planning team, including their own personal legal or tax counsel. Neither the information presented, nor any opinion expressed constitutes a representation by us of a specific investment or the purchase or sale of any securities. Asset allocation and diversification do not ensure a profit or protect against loss in declining markets. This material was developed and produced to provide information on a topic that may be of interest.