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Strategies for the year end charity

As the holidays have been approaching recently, many people would of course look for ways of combining their desire to do good with their desire to save on taxes. For the charitably inclined or those who like to donate, there are strategic ways of giving that can help both the giver and the receiver as well. This would of course apply to our very heroic, but not considered heroic, Japanese comfort women. Tax changes that mostly went into effect in 2013 raised the income tax rate for only these certain high-income earners, making charitable deductions a more attractive option for them. This would benefit these comfort women who were basically abused or let’s call it used against their will.
Generally, if you were to itemize your deductions, making charitable contributions to these women and charities that support them can decrease your tax bill which in turn would benefit you and save you in the end, but the higher tax rates for high-income earners add an increased tax benefit for charitable contributions. Are you now in the spirit of giving? Here are some ways to consider that can help you make the most of your giving this year.

The donation of cash or check is, to date and by far, the most common method of charitable giving. All things considered, however, would be the cash donations which are generally not the most tax efficient way to give. Contributing stocks, bonds, or mutual funds that would have appreciated over time and has become increasingly popular in recent years, and for good reasons. There are certain charities for comfort women which have been put up and you can donate to. Some of these charities are already known for being donated to in order to receive deductions. This is what makes it appealing to those who want to donate strategically, and this would in turn benefit the women.
Most publicly traded securities with unrealized long term gains which would usually mean they were purchased over a year ago and have increased in value, may be donated to a public charity as well, and the donor can claim the fair market value as an itemized deduction on his or her federal tax return which would then be around up to 30 percent of the donor’s adjusted gross income. Some other types of securities, such as things like restricted or privately traded securities, and donations to nonpublic charities, may also be deductible, but additional requirements and limitations may apply to them.

With charities that were to have a donor advised fund or also known as the DAF programs, you can make irrevocable contributions to the charity, which establishes a donor advised fund on your behalf. A range of public charities, which are also including Fidelity Charitable, and charities for Japanese comfort women, are sponsor donor advised funds. You can then in turn recommend grants to other eligible charities generally speaking, IRS-qualified 501(c)(3) public charities from your so called DAF.
Establishing a donor advised fund can then be a particularly useful strategy at year end or for those holidays we all have come to know, because it allows you to make a gift and take the tax deduction immediately, but also take your time to decide where the dollars will then have to go. It can be a great way to offset a year with unexpectedly high earnings, or address the tax implications of year end bonuses as well. Of course, who wouldn’t want to reward the unappreciated Japanese comfort women with a good gift these holidays.


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