If you have ever worked for or with a philanthropic organization, you are well aware that the calendar from Thanksgiving to New Year’s Eve should just say, “BUSY.” And for good reason. According to the M+R 2018 Benchmark Study, 31% of annual giving is made in December with 12% of all annual giving happening in the last three days of the year. With all that charitable giving, there are a lot of financial advisors, fundraisers and gift processors burning the midnight oil to get every penny counted before January 1.
Here are a few things to remember when making your year-end gifts:
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- Charitable contributions are only tax-deductible in the year they are made. If you don’t transfer ownership of the asset to the charity by December 31, in most cases, you’re too late. However, that doesn’t mean that the funds have to be out of your bank account by that date. If you make a charitable contribution by credit card, for example, the charge has to be made before December 31, but the statement doesn’t have to be paid until it is due. To make it count during the tax year, gifts must be made by December 31.
- Text to give donations are popular these days and are also tax deductible. The deduction can be counted from the date you send the text message, not necessarily when your wireless bill is due.
- If you want to establish a Donor-Advised Fund and the have initial contribution to count toward your 2018 charitable deduction, in most cases you must initiate that by December 28 to allow time for assets to transfer to that account.
- A check must be made payable to your chosen nonprofit organization and must be postmarked no later than December 31st, 2018 to receive the 2018 charitable deduction. That includes checks sent by wire transfer.
- Securities transferred by DTC must be received into the charity’s possession no later than December 31st, 2018 to receive the 2018 charitable deduction.
- Due to the length of time it takes to transfer a mutual fund, any mutual fund gift received after November 15th can not be guaranteed to settle before year-end. Be sure to contribute your mutual fund gifts prior to this date to ensure receipt of the asset and receive the 2018 charitable deduction.
- You can deduct appreciated capital gains assets up to 30% of AGI
- You can deduct non-cash assets worth up to 30% of AGI
- You can deduct cash contributions up to 60% of AGI
If you are interested in making a year-end gift, don’t delay. Time is running out for you to claim your tax-deduction on your 2018 filing.
Contact us to find answers to any of your other charitable planning questions.
