By:  Laura Marx,  518 ElevatED, President & CEO

It is proven that giving back to the community boosts your happiness, health, and sense of well-being. As we close out the year and people are thinking about making charitable gifts, it is helpful to know what you can do to make the most of that donation. 

The most common forms of donating are writing a check or giving online through the nonprofit’s website. The donor can even cover the fees associated with that transaction, which I am sure all charities appreciate. However, other methods may be beneficial for the donor to receive additional tax benefits. 

Individual retirement account funds offer a special tax break. If you are 70 ½ or older, you may use Qualified Charitable Distributions (QCD) from your IRA donated directly to a tax-exempt organization without paying income tax on the distribution. When transferred at age 72 or older, the transaction may satisfy the required minimum distributions and accomplish other tax goals. The primary benefit of this type of transaction is that it doesn’t count as taxable income, which is especially beneficial if you do not itemize your tax return and cannot claim charitable deductions. 

Another area that may be helpful is the donation of stock. If you donate stock that you’ve held for at least 12 months, you can deduct the full value of the investment without having to pay any capital gains on the appreciation. The current fair market value of the stock is deducted from your taxable income. 

Many nonprofit organizations have methods in place to accept these alternate forms of donations. Be sure to reach out to your charity of choice for specific details on how to donate. As always, talk to your financial advisor and tax specialist to develop a plan that is best for you and your situation. 

At 518 ElevatED, we appreciate our community of supporters who remember our Scholars and our programs in their year-end giving plans.