Year-End Tax Planning & Giving

Continuing last week's theme of a simple (but impactful) action and tying in some year-end tax planning, I’ll introduce the “donor-advised fund” as a tool to practice some holiday spirit.

Many people want to donate before year-end to deduct on the current year tax return, but don’t know where to donate and/or don’t want to make a rushed decision. Enter the donor-advised fund.

Since a donor-advised fund is a non-profit itself, donations into it are deductible in the current tax year. However, you can leave the donated assets in the donor-advised fund indefinitely. You can donate them next year or the year after or whenever.

It’s a great tax tool because it allows you to separate when you donate assets for tax purposes from when you donate them to a non-profit. So, if you want to do some holiday giving, but aren’t yet sure where to give or want to lower your 2015 taxable income, consider using a donor-advised fund.