Planning Charitible Donations

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Planning Charitible Donations

Charity is one of the best things in life. Being able to help other people is a great thing to do once you have your own affairs in order. While you can donate your time, talents and treasure in a lot of ways, the easiest and often the most efficient way is to donate your money to a not-for-profit charitable organization. You can do this during your life and even after you die, and the process is a fairly simple and straightforward one.

During your life, you can donate to charities in a variety of ways. The process of donating can be as simple as anonymously dropping some money into the mail slot of a nonprofit company and letting them keep it, but this does carry the disadvantage that you won’t be able to deduct the donation from your taxes effectively.

Strategies for Charitable Contributions

The Internal Revenue Service (IRS) has specific regulations about how much money you can donate and deduct without receiving a receipt, and any donation that is not entirely anonymous will allow you to get a receipt for it. Ultimately, this comes down to whether you want to maximize the benefit for your charity while generating the smallest taxes possible. One common tax-avoidance strategy is to donate stock or other securities that have appreciated in value instead of donating cash to non-profit organizations. This donation avoids the capital gains taxes that would have been generated if you sold the asset and donated the cash proceeds. You can learn more about IRS rules on charitable giving at www.irs.gov.

You can also have an amount deducted from each of your paychecks to donate to the less fortunate. You probably won’t miss this money, and it’s a very easy way to give back to the world and help other people.

If your bank allows you to pay bills from an online portal, you can even setup your charity of choice as a “bill” and have money sent there automatically every so often. But, of course, you can’t take your money with you.

Your wealth doesn’t die with you, but it does need to get distributed somehow. When you write your will, and you would be very wise to do this sooner instead of later, you need to decide who or what will get what you’ve spent your life earning and saving. Your wealth can go to your charity of choice through as little as a line in your will’s distribution memorandum. Consult an attorney who works in family law or probate law to find out how to properly write your will. This will help minimize vagueness and ensure the right entities receive what you want them to.

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