Today’s question is all about year-end charitable gift planning. There are a couple of things you should think about when it comes to charitable contributions and particularly, why doing things during the calendar year could be beneficial to you.

Employer Benefits

When considering the employer benefits of charitable giving, it’s worth noting that some employers are willing to match their employees’ contributions. For instance, Johnson Brunetti will match up to $1,000 per year for each team member. Efforts like these amplify the influence of our personal contributions and inspire change within the community.

So, if you’re gifting to charities and your employer is willing to match on top of that, make sure you’re taking advantage. Maybe you’ve only gifted $500 this year, but with an employer match, that’s $1,000, and all of a sudden you’ve doubled your impact.

Required Minimum Distributions (RMDs)

If you’re at the point where you’re over the age of 70 or you’re being forced to take Required Minimum Distributions (RMDs) out of your retirement accounts, make your charitable contributions from your IRAs. That is the only way to truly pay zero taxes on that retirement money.

As a financial planner, we have people coming into our office all the time, saying, “How do I pay no taxes on my retirement money?” The only way is to give it to charity.

You are allowed to gift up to $100,000 a year out of your IRA directly to charity. Of course, you do not have to gift all $100,000, but any gifts that you make will actually count towards your RMD for that year.

So, if your RMDs are just forcing taxable income upon you that you don’t necessarily need and you’re gifting from non-retirement accounts anyway, turn that faucet off. Make those gifts from the IRAs. That is truly a way where you can satisfy the RMD and pay zero taxes on that money.