Not getting tax deductions for your charitable contributions?

Not getting tax deductions for your charitable contributions?

Call us to see if a donor-advised fund might make sense for you. When the higher standard deduction amounts went into effect in 2018, many people stopped itemizing deductions on their taxes. This is because the sum of the items to be itemized, most commonly mortgage interest, charitable contributions, and state and local taxes, is lower than the new standard deduction. Consequently, you may not receive any tax benefit for making charitable contributions.  If you made enough charitable contributions in the year so your total deductions exceed the standard deduction, then bingo, you’ve increased your deductible amount.

But what if you don’t want to give that much directly to charity in one year? You could give to your donor-advised fund, receive the deduction in the current year, and then disburse the money to charities over time.

Think of donor-advised funds as your personal foundation. You fund it with your assets (can be cash and certain other assets), it can be invested and grow tax-free while it is held inside the fund, and then you can make contributions to charities from the fund in the years ahead – even after your death.


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Donor-advised funds

  • Deductibility limits of 60% of AGI for cash and 30% of AGI for other assets.
  • Can be useful for giving away assets with unrealized long-term gains.
  • Gifts to a fund are irrevocable.
  • You can make contributions from the fund to charities over time.
  • Can be useful component of estate planning.