Fall is a perfect time to tidy up – and this also applies to making your final plans for 2024 gifts to charity! Please contact us soon regarding any charitable gifts you wish to make before year end, as Fidelity and other asset managers have early December deadlines to guarantee 2024 charitable contributions and asset transfers. Cash gifts remain the most popular method of giving to charity, but other types of gifts may offer a greater tax advantage, due to the federal standard deduction which requires that individuals reach itemized deduction thresholds (starting at $14,600 for individuals & increasing for joint filers and those over 65), before they can itemize cash charitable contributions.
One of the most favorable tax advantaged forms of giving remains the IRA Qualified Charitable Distribution (QCD) for taxpayers 70 ½ and older. Non-itemizers can take advantage of tax savings, as your tax preparer will reduce your total taxable IRA income by the amount of QCDs, up to $105,000 per year. The funds must be issued directly from Heartland Trust Company or your IRA custodian to the charity; simply contact us with the charity name, address, and amount of your gift.
Highly appreciated stocks, mutual funds, and real estate make excellent gifts for itemizers and those interested in more complex charitable contributions, such as charitable gift annuities and charitable trusts. Contact us if you are interested in making this type of gift to your favorite charity.
North Dakota continues their 40% Qualified Endowment Fund Tax Credit for an annual contribution of $5,000 or more up to a maximum of $25,000 for individual filers ($50,000 for joint filers) to a charity that has a ND Qualified Endowment Fund. A similar Planned Gift Tax Credit is available for North Dakota residents who establish a charitable trust, gift annuity, life estate or paid-up life insurance policy naming a charity as the beneficiary.
The Federal Estate Tax Exemption – the amount an individual can leave to family and other individuals free of estate tax – is scheduled to sunset on December 31, 2025. This means that the current estate tax exemption amounts of $13.61 million for individuals ($27.22 million for married couples) will revert to approximately $7 million per individual ($14 million for married couples). Local attorneys have indicated that their calendars are very busy assisting clients in planning for this sunset, so if you need assistance in determining if your assets are approaching the sunset threshold, please seek legal advice soon. We are happy to help you evaluate your assets to determine if pre-sunset legal planning may be in your best interest.
