Year-end. It’s a time for Christmas celebrations, but for many, also a time to frantically calculate their taxes and year-end giving.
December 31 is a real deadline. Contributions made after that time don’t count for tax deduction purposes. For some, December is further complicated by the fact that they are selling businesses or assets and need to close the deal by year-end—on top of everything else going on.
The statistics tell us that at least 30% of the entire year’s worth of giving will take place in December. And 30% of that will take place in the final three days of the year. Sadly, we see many who miss their opportunity and give up, only to face the tax bill in April or beyond.
Of course, the biggest opportunity is not the missed tax deduction. Instead it’s the missed opportunity to have an extra chunk available for giving.
That extra chunk translates to an opportunity to give as a family, an opportunity to discuss family values around giving, and an opportunity to make a difference in the world.
Tips for Year-End Giving Success
So here are three tips to consider as you approach year-end:
First, make a plan, and plan to give. It’s first about intention. I believe you’ll find greater motivation for the effort involved if you really desire to make the gift. That resolve is key to planning and working to gain the tax deduction and gain the opportunity to give as a family.
Second, begin early. I know there are lots of unknowns, particularly given how assets may appreciate, stocks perform, or how a transaction may go down. But have a proactive conversation with your advisors about your plan to give. They can assist with scenario-based planning that will allow you to pull the trigger even at the last minute.
And keep in mind, even if you somehow give more than you can claim for tax deductions, you are allowed to carry over any excess for up to five years.
(Also check out The Signatry’s helpful list of year-end deadlines for specific types of gifts, from cash to publicly traded stock and IRA distributions.)
Third, involve your family. Talk to your spouse. Let your spouse be part of the decision-making process. You may find that giving is a good area of risk and acting on your faith that can better be shared as a couple. And involve your children too. Let them participate in year-end giving projects. Find a needy family, or someone with an illness or even take a day for a random giving exercise.
A Simple Giving Tool
And of course keep in mind that as you approach year-end, the donor advised fund is a simple tool where you can contribute at year-end but not feel pressured to give out the entire amount immediately. It will give you the opportunity to give strategically throughout the year.
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Published October 4, 2019