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The holiday season is a time of giving gifts to the ones you love. As you shop for stocking stuffers and gifts for your loved ones, consider also making charitable contributions to organizations you support. In addition to the good work that can be accomplished through your generosity, year-end contributions can help you maximize your tax benefits. With a strategic approach, you can make a great impact for both the causes that are important to you and your own financial plan. While we believe that the most effective, personalized strategies are created with the help of your financial adviser, the following steps will help you get started on your own strategic plan.
First and foremost, it’s critical that you approach this area of your finances with diligence. Giving in its own right is a wonderful and important thing, but if you hope to be able to use your gift as a financial benefit for yourself, there are multiple nuances to consider before leaping in. Consult your budget to determine the amount you have to give; being specific with your budget allows you to give with confidence.
Choose charities that are meaningful to you personally. Perhaps the organization you choose to support this year is one that supports a cause near to your heart. Maybe it has impacted or assisted your family in the past. With so many nonprofits out there, it is often helpful for people to find one that they connect with personally. As you make your selection, be aware that there are tools available, such as Charity Navigator, that provide information on nonprofits’ financial transparency, impact, leadership, and overall financial health. If you want to ensure that your donation goes to an organization that utilizes donations in an effective manner, researching with tools like this can help you make informed decisions.
Don’t be boxed into a one-time cash donation. Donor-advised tax funds, stock donations, and qualified charitable distributions are just some of the multiple options for giving aside from cash donations. With donor-advised funds, you have the ability to give now (and receive an immediate tax benefit) and decide on the recipient of your donation later. If you want true flexibility in your giving, this is a great option.
Did you know you can donate securities? You can! This can help you avoid capital gains taxes while also receiving a deduction for the full market value of your stocks. If you have part of a portfolio that you wish to donate, appreciated stock donations are an excellent choice.
Qualified charitable distributions (QCDs), for those over 70 1/2, allow you to donate directly from your IRA. Up to $105,000 can be transferred tax-free to a charity each year. This counts as part of your required minimum distribution and reduces your overall taxable income. For those in this age bracket, QCDs can be a beneficial choice.
And, of course, it’s important to note that there are numerous other ways to give without cash contributions. Many nonprofit organizations also accept donations of goods, services, and your valuable time. If now is not a good time for you to make a financial donation, consider investing your time in volunteering or donating items that could be useful to a nonprofit organization. These donations are just as appreciated and are another meaningful way you can contribute this holiday season.
Year-end giving is a valuable opportunity to reflect on the year and plan for the future. What organizations do you want to help prosper in 2025? Choosing organizations that are important to you and using a strategic plan to make your donations can help you simultaneously fulfill your philanthropic goals and support your own financial health. Here at GDS Wealth Management, we are happy to help you navigate this process. Our helpful advisers can provide personalized insight for your specific situation, and we would be happy to help you come up with an individualized strategy for your year-end giving. Contact us today at (469) 212-8072 or visit www.gdswealth.com.
GDS Wealth Management (“GDS”) is an SEC registered investment adviser located in Flower Mound, Texas. Registration as an investment adviser does not imply a certain level of skill or training. GDS does not provide tax or legal advice. You should contact your tax adviser, accountant, and/or attorney before making any decisions with tax or legal implications. All information is provided solely for convenience purposes, and you should be guided accordingly. This presentation contains general information that is not suitable for everyone and was prepared for informational purposes only. Nothing contained herein should be construed as a solicitation to buy or sell any security or as an offer to provide investment advice. GDS Wealth Management (“GDS”) is a registered investment adviser. For additional information about GDS, including its services and fees, send for the firm’s disclosure brochure using the contact information contained herein or visit advisorinfo.sec.gov. The information contained herein is based upon certain assumptions, theories, and principles that do not completely or accurately reflect any one client's situation or a whole exposition of the topic. All opinions or views reflect the judgment of the authors as of the publication date and are subject to change without notice. This communication contains certain forward-looking statements that indicate future possibilities. Due to known and unknown risks, other uncertainties and factors, actual results may differ materially. As such, there is no guarantee that any views and opinions expressed herein will come to pass.
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