Make a gift through your IRA starting at age 70½.
At age 72, you’re required to start taking a minimum distribution from your IRA. However, you can make direct donations to charitable organizations beginning at age 70½. These donations are called Qualified Charitable Distributions (QCDs), and each eligible individual can give up to $100,000 per year. This is a smart way to give, as QCDs are not taxed. After age 72, QCDs can be used to fulfill your required minimum distribution each year.
Reduce taxes for your heirs with one simple beneficiary change.
Many donors include charitable gifts to Pacific in their estate plans. One tax-smart strategy is to designate Pacific as a beneficiary in your IRA, 401(k), or 403(b) account, or to designate a charitable gift to Pacific from your retirement account as part of your will or trust. Designating a charitable gift specifically from a retirement account allows your heirs to receive other, non-taxable assets from your estate, which can save them income taxes.
Leverage “bunching” or use a Donor Advised Fund (DAF) to give annually.
If your total itemized deductions are less than $13,850 (for single filers) or $27,700 (for married couples filing jointly), you could benefit from “bunching” your 2023 and 2024 charitable donations together in 2023 to exceed your 2023 standard deduction. You can then itemize deductions on your 2023 tax return and take the standard deduction for 2024 taxes. This strategy may produce a larger one-time deduction than two years’ standard deductions.
Take advantage of inflation.
As we continue to experience rising costs, your own assets may be increasing in value. Consider making year-end charitable gifts using appreciated non-cash assets rather than cash. Appreciated assets like stocks create two tax benefits: You’ll offset capital gains, and you’ll receive a charitable deduction on your tax return.
Take advantage of higher interest rates.
Interest rates have gone up, but so have Charitable Gift Annuity (CGA) annual payout rates. You can lock in these higher rates for one or two lives when you set up a CGA through Pacific. This type of gift pays you or a loved one income for life, and the higher rates create a larger charitable deduction. Double up on your tax benefits by establishing a CGA using appreciated assets instead of cash.