Did you know: You can donate – and save on taxes?
If you decide to make charitable contributions to qualified tax-exempt organizations, you can potentially save on your taxes. The most common way is to reduce your taxable income by itemizing your deductions and deducting your charitable contributions.
You can also avoid capital gains taxes by donating appreciated stock directly to a charitable organization. Just ask your broker to transfer stock directly to the account of organization(s) you wish to donate to. You can claim the full market value of the stock on the date of transfer as a charitable deduction and the organization receives the stock at its market value on the day of the transfer, yet neither you nor the organization is required to pay capital gains tax on the amount of value the stock gained since you purchased it.
And, if you are over 73 years old and are required to take distributions from your taxable IRA, you can have a portion (or all, up to $100,000 per person – married couples have up to $100,000 per spouse if each of them has an IRA) of your distribution sent directly to the tax-exempt organization of your choice. The distribution that you transfer directly to a qualified charity reduces your Adjusted Gross Income, which reduces your taxes – even if you don’t itemize your deductions. In Indiana, this treatment has the added benefit of reducing your state taxes: itemized charitable contributions don’t produce this reduction, since State taxes do not take most itemized deductions into account.
The Bull Dog Alumni Association is a not-for-profit Indiana charity that has been recognized by the IRS as an exempt organization pursuant to IRC 501(c) (3). Please note that the Bull Dog Alumni Association is not qualified or authorized to provide tax or legal advice. Ask your tax advisor if you qualify for these tax-saving ways of making donations. Or if you have questions about making stock or IRA donations directly to the Bull Dog Alumni Association, email Tom Tremain at firstname.lastname@example.org.