It’s the season for email newsletters hitting your inbox with tips for tax planning! With so much information flying around, here are a few key tax strategies you may want to consider before late December:
  • “Bundling” or “bunching” multiple gifts into tax year 2021 can help you if you have had an exceptionally high income this year. Donor-advised funds at the Community Foundation are particularly useful in these situations. We’d love to discuss this option!
  • Donating highly appreciated stock can have a great tax benefit. When you donate stock, you avoid capital gains tax while deducting the fair market value of the contribution, up to the amount allowed by federal law.
  • Unlike in 2020, when pandemic relief laws offered a tax break, this year you must take required minimum distributions from your qualified retirement accounts. Especially if you take the standard deduction, you ought to consider a qualified charitable distribution, which allows eligible individuals to donate up to $100,000 directly from individual retirement accounts to a qualified charity. While Donor Advised Funds don’t qualify for this, our programmatic funds do, including our Community Grantmaking Fund, Fund for Women and Girls, Trenton Arts Fund, and the New Jersey Arts and Culture Recovery Fund. In addition, we would be happy to help you identify a qualified charity or help you create a qualifying fund at the Community Foundation to receive a distribution.
  • Don’t miss out on the few provisions of the 2020 Coronavirus Aid, Relief, and Economic Security (CARES) Act that carried over to 2021, including the ability to deduct up to 100% of adjusted gross income (AGI) for cash gifts made directly to qualifying charities.
As always, please contact us or your tax advisor to find out how to make year-end tax savings as easy as possible for you and your family.