Bunching your charitable donations may help you exceed the charitable deduction and save on taxes. The standard deduction has nearly doubled for 2018 so whether you can claim the charitable contribution deduction for your annual gifts this year may depend on whether you have enough other itemized deductions to exceed the standard deduction. If you have the financial flexibility, you may want to frontload your donor advised fund in a particular year with enough to cover contributions to your favorite charities for several years. This approach may help you claim the deduction on the itemized tax return that year. You’ll get the tax deduction for the large contribution to the donor advised fund (DAF) one year and then you can distribute the funds to your favorite charities over multiple years. For example, instead of giving $10,000 per year to various charities, you could contribute $50,000 to a DAF in 2018, claim the deduction on the 2018 itemized tax return, and then recommend both the amounts and charitable recipients of grants from that fund over the next five years. Cash gifts to a public charity (including DAFs) are now deductible up to 60% of Adjusted Gross Income (AGI), and any contributions exceeding the AGI limits can still be carried forward five years.
When making your year‐end gifts, appreciated stocks can help you give more while costing you less. By design, investment portfolios fluctuate through the years. If you opt to sell any investments that are worth more than what you originally paid for them, you must pay capital gains tax. HawaiiCommunityFoundation.org