To continue on with our last topic, saving taxes while giving to charity we offer some new kinds of philanthropy that includes making a donation and saving taxes. Here are some other types of donations.
The first one is giving a paid up, life insurance policy to charity. It suits you, for example, if your children are grown and gone, but you have their life insurance policies paid up, keeping them artificially inflates the value of your personal balance sheet and makes it more likely your estate will owe federal estate tax. You have two options. You can retain the ownership of the policy and simply change the beneficiary designation so that the charity will receive the proceeds out of probate, and your taxable income will be reduced. You can also claim an income tax deduction by making a charity the owner and beneficiary of the policy.
The second way is to make a donation by giving a savings bond (i. e. Series EE) to charity. Giving a Series EE bond still triggers income tax, but it also qualifies for a tax deduction.
Finally you can fund a donor advised fund, this is an alternative to private foundation with assets and you receive an immediate income tax deduction. You’ll be able to make grants to charities at any time, even years in the future. DAFs enjoy higher tax deduction limits compared to private foundations and do not require a separate tax return.
As you can see there are several different ways to make a donation while saving on taxes.
No comments:
Post a Comment