Make your year-end giving count.
If you have some wiggle room in your budget, deciding how to spend that extra money may fuel your daydreams. How would your hard-earned money be best spent? How can it improve your life? One answer: donate it to a worthy cause—like the ONYX Foundation. Research shows that donating money makes people happier than spending it on themselves. By donating, you can improve your mental wellness while supporting the well-being of others.
Before making a donation to any organization, speak with your financial advisor Here are some other benefits to giving:
- Lower Your Tax Bill: If you itemize deductions on your tax return, charitable donations can help you lower your taxable income up to 60% of your adjusted gross income (AGI) for donations to public charities and up to 30% for donations made to certain private foundations, veterans organizations, fraternal societies, and cemetery organizations. Any dollars gifted above these limits can be carried forward for five subsequent tax years. Your AGI limit percentage also varies by the type of asset you’re donating, whether it’s cash, capital gains property (typically investments held longer than one year), or ordinary income property.
- Reduce Your Taxable Estate: If your estate is subject to estate tax, gifting assets can help reduce the size of your taxable estate. For example, if your taxable estate is above the estate tax exemption limits, the amount above the limit will be taxed at the highest estate tax rate, which is currently 40%. The 2024 federal estate tax exemption limits are now $13,610,000 for an individual and $27,220,000 for a married couple.
- Help Avoid Capital Gains Taxes: Gifting highly appreciated stocks can be a win-win situation for the donor and the charity. For example, if you received equity compensation at a low stock price and the value has since doubled, you can avoid additional taxes and capital gains by gifting these stocks. When you gift stock to qualified charities, you don’t pay capital gains tax on the stock — and neither does the charity. In essence, you end up gifting the full value of your stock and having a greater impact than if you had sold your stock first, paid the capital gains tax liability, and then made the charitable donation. Read more about how you can use your concentrated positions to maximize your charitable giving.
