Getting Back to Giving Back
Email This Article
Nathaniel Ritchison
April 12th, 2010
As tax season comes to a close, millions of Americans are looking for a way to lower their tax bill. One way to lower your taxes while supporting your favorite cause is to make a charitable gift. With the struggles in the economy still fresh on our minds, charitable fund-raising over the last few years has fallen on hard times. However, as we emerge from The Great Recession we are noticing that our clients’ increasing confidence in the economy is giving way to a renewed interest in charitable giving. Here are some great ways to get back to giving back.
Spread, Don’t Cancel
Maybe you were planning on making a large cash donation this year to your favorite charity, say for $5,000, but now doesn’t seem the right time to commit that amount of money. Why not spread that donation over the next five years in $1,000 increments.
Donate Items, Not Just Money
By donating items such as artwork, collectibles, appreciated stock or real estate, you are able to realize an immediate income tax deduction, while allowing the charity to hold assets that can be sold at a later date allowing them to appreciate.
Update Your Bequests
Since assets in estates have shrunk over the last few years, some people with existing estate plans are reconsidering the amount they want to commit to their favorite charities. By making changes to your bequests, you can specify the maximum amount you would like to pass to your beneficiaries, while any amount over that can go to your charity.
Give and Get with a CRT
A charitable remainder trust (CRT) allows you to donate property or money to a charity, and in return you receive an income tax deduction in the year the gift was made and income (or use) of the property usually until you pass away, at which time the charity will receive the asset. Although a more complex estate planning tool, the CRT can be a great fit for anyone that is looking to lower their income and estate taxes while receiving a steady income in retirement.
Using Donor Advised Funds
The fastest growing charitable giving vehicle in the US, donor advised funds, affords you all the benefits of your own private foundation without having to establish and administer one. Because the fund is housed by a specific public charity, donations made to the fund receive the maximum tax deduction.
Establish a Lasting Legacy
The ultimate in planned giving is the private foundation. By establishing and administering a private foundation, you are able to directly help the causes or individuals you care about most with your donations. However, with increased control comes an increase in cost and administration.
No matter where you find yourself on the spectrum of planned giving, with a little creativity you can develop a plan that meets both your current goals while working within your overall Financial Plan. If you would like more help in developing your Giving Plan and understanding how it fits into your overall Financial Plan, please give us a call and I would be happy to set up a meeting focused on helping you give back to the causes that mean the most to you. As always, be sure to discuss any gifting with your tax preparer and attorney to make sure your gifting plan is right for your particular situation.
Client Success Stories
Email This Article
Bruce Doole
March 15th, 2010
Every quarter we write to you and give our perspective on what is happening in the market and in the broader economy. This month we wanted to share some success stories from clients and colleagues to show what is possible with the right advice and planning.
Financial (In)Dependence…?
A financially independent client came to us to ask if we could help a friend (we encourage clients to enlist us to help not only their friends but especially their adult children) who had a number of serious but solvable financial problems. She had no job, poor credit, huge monthly minimum payments on her credit cards, and only a couple hundred dollars in the bank (I know, that sounds like most of this country). Not knowing what she was spending was also a leading factor in the problems she was incurring. She had sold her house to join forces and move to a bigger house with one of her children but they had told her she couldn’t be on the title because of her credit. They were taking advantage of her weakened financial situation and were making life very difficult for her. Her objective was to buy a condo and be able to live on her own. Within twelve months, we had uncovered a six-figure hidden asset and converted it to cash, used it for a down payment on a new home, and and made it possible for her to find a well-paying salaried job, start contributing to her 401k, and ultimately have a much better relationship with her children and grandchildren.
Turbo Charge Your Retirement Fund
Finally, we helped another successful client build a large retirement fund in only four years that will be able to provide significant retirement income in the years ahead. Most people think of retirement accounts like IRAs and 401ks that have strict limits on tax deductible contributions as well as income limitations to even contribute to them. If you are self-employed, over 50, and have an income that significantly exceeds your expenses, even if it is only for a relatively short time we can help set up a retirement plan that can save you tens of thousands of dollars in taxes and ultimately be rolled over into an IRA to provide a sizable retirement income for your future. All told we probably saved this client over $200,000 in taxes over four years which went straight into their retirement account.
Have A (Less) Taxing Time of Year
Email This Article
Bruce Doole
February 2nd, 2010
IT’S THE MOST… WONDERFUL TIME… OF THE YEAR (FOR CPAS ANYWAY)
For the rest of us it’s time to gather our tax information and hope we took enough deductions and withholdings to get a refund (or at worst write a very small check) from the IRS. We become very aware of how effective our tax planning was at this time and frequently make a resolution to do better at it next year. It’s our job here at Permanent Value to take the guess work out of tax time and help make effective tax planning a part of your financial routine. We want you to be confident you did everything possible to minimize your tax bill. We engage top tax experts to scrutinize your financial situation and give you the best tax advice when it makes sense for you, well before the end of the year. This is what full-service comprehensive financial planning is all about.
Read the rest of this entry »
