Tips about tax-wise giving

It’s almost year’s end. “’Tis the season to be giving!” As each year ends, we are swamped with requests to give to charities, churches, schools and foundations. But is year-end really a good time to give? If so, why? Aside from the holiday spirit that urges us to be giving, December really is a great time for giving for a number of reasons.

First, it’s a great time to give because we have had the year to think about how we can respond to the blessings we’ve received during the year, so we don’t have to make snap decisions. At year-end, we can look back at how the year has gone for us, financially or otherwise. At the beginning of the year, we have little to go on yet.

Secondly, whatever we plan to give, whether it is stock, cash, or mutual funds, we have had the use of the asset for the entire year. From a tax deduction standpoint, a gift that is given in December results in the same deduction on your tax return as a gift that is given in January.

Third, there are other special tax reasons to consider giving in the year 2009. As I write this, we don’t know what Congress or the president may do with the Income Tax Code before year’s end. Heaven knows that Uncle Sam will need more money to pay back all of the clunker deals, the hundreds of billions for bailouts, the extension of unemployment benefits, health care reform, and a host of other federal spending. The interest alone on the federal debt is $500 million a day. There are only two ways to pay back the debt. Either taxes increase or spending is cut (although 1981 showed that you can increase revenue by decreasing tax rates). And with all of the needs the nation has, spending will not be cut.

There are proposals now in Congress to limit the amount of charitable deductions allowed to high income donors, take away the tax advantaged permission to make direct gifts from IRAs, raise the capital gains tax, and to favor government “approved” charities just to name a few. The truth is that we don’t know what Congress will do before year’s end because they don’t even know. But it is a safe bet that charitable gifts to your selected charity will not be better treated next year than this year; it may actually be worse, so if you’re thinking of a charitable gift, don’t wait until next year.

Finally, the holiday season brings on a “good will to all” feeling that does not always exist year round. Giving and sharing with those who are less fortunate can bring wonderful rewards to the donor, knowing that he or she is making a difference.

Now is actually a good time to consider

a gift to the Southwest Florida Community Foundation, since by doing so you can have a voice in how your gift will be allocated to the recipients of your benevolence. Just a few of the ways you can give through SWFLCF are:

. Creating or adding

to your own Donor Advised Fund, which will have the special touch of your benevolence

. Giving appreciated stock or mutual fund shares for which you will receive an income tax deduction on the present value rather than your initial cost

. Paying your Founders Society membership dues for 2010 in December and taking the tax deduction in 2009

. Establishing a new Charitable Gift Annuity, which will give you a substantial tax deduction for this year and assure you of a favorable fixed income for life

. Contributing cash or stocks to an endowment fund that your favorite charity has with SWFLCF.

These are just a few possibilities you might want to consider for your year-end giving. There are many more, but please don’t wait until Dec. 31, as many choices may take time to effect the transfers. For more information, call the Community Foundation office at 274-5900 or talk to your tax or legal advisor today. 

— The Southwest Florida Community Foundation has been supporting the communities of Lee, Charlotte, Collier, Glades and Hendry counties for over 33 years. Through 323 endowed funds, the Community Foundation has provided more than $44 million in grants and scholarships to the communities it serves. For more information, call 274-5900, or visit www.floridacommunity.com.