How to help make the most of your charitable giving this season : The year-end and the holiday season tend to be a time of giving for many of us, both to friends and family and also to charitable organizations.

Dec 22, 2014 ● By Kenneth Novak, CFP®, financial consultant at Charles Schwab & Co.

The year-end and the holiday season tend to be a time of giving for many of us, both to friends and family and also to charitable organizations. While it’s important to support causes that are important to you, I always encourage my clients to consider how charitable giving fits within their broader financial plan for the long-term. We find that when our clients stick to a plan, it helps them build wealth and meet their financial goals, which can put them in a better position to give with greater impact to the causes that are meaningful to them.

In fact, a survey of 1,000 Chicagoland residents released by Charles Schwab in September found a correlation between financial planning and charitable giving. Three in four Chicagoans in the study who donate to charity also have a financial plan in place. Of those who are not givers, nearly 60 percent say they don’t have a financial plan.

Consider these ground rules as you think about your charitable giving strategy to help you make the greatest impact with your generosity while also receiving some tax savings.

1. Itemize deductions on your tax return if you plan to deduct charitable donations. The standard deduction for the 2014 tax years is $6,200 for singles, $12,400 for married filing jointly. If you think your itemized deductions will exceed that amount, then there are some additional IRS rules to consider, so it’s best to consult with a tax professional as you plan your donations for the year.

2. Request receipts for donations of $250 or more. Make sure there’s a record of the organization's name, date and place of the contribution, and a description of what you gave. For any cash contribution you need a receipt or corroborating bank record that includes the date, amount, and name of the charity.

3. Get independent appraisals for gifts of property over $5,000 ($10,000 for stock that is not traded publicly). You won’t need an appraisal for widely-held stocks, bonds or mutual funds.

Giving And as you consider where to make your donations, check an organization’s tax status. Nearly all 501(c)(3) organizations are eligible to receive tax-deductible contributions, but it’s always best to ask the charity you plan to donate to about its tax status or you can check the IRS’ online databased for qualified organizations.

One way to make the most of your giving is through a donor-advised fund, which is a pool of money managed by a charitable organization on behalf of many donors. You can open this type of account with a tax-deductible contribution and then make grants to any public charity over time. You can contribute a variety of tax-deductible assets, including appreciated securities, real estate and cash, and the fund sponsor handles all the administrative details.

And remember, if you make charitable donations with a more holistic plan in place, you will likely have a better impact on the organizations you donate to and your overall financial picture.

Kenneth Novak, CFP, is a financial consultant at Charles Schwab& Co, Inc. (Member SIPC) with more than 14 years of experience helping clients achieve their financial goals. You can visit Kenneth at the Charles Schwab branch at 430 N. Michigan Avenue or email him at [email protected].

A donor’s ability to claim itemized deductions is subject to a variety of limitations depending on the donor’s specific tax situation. Consult your tax advisor for more information. Information presented is for general informational purposes only and is not intended as personalized investment or tax advice as individual situations vary. Charles Schwab does not provide tax advice. Where specific advice is necessary or appropriate, Charles Schwab recommends consultation with a qualified professional. Brokerage Products: Not FDIC-Insured · No Bank Guarantee · May Lose Value

Natural-Awakenings-Blog 2014 Issue Blog Community Business and Finance

How to help make the most of your charitable giving this season : The year-end and the holiday season tend to be a time of giving for many of us, both to friends and family and also to charitable organizations.

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