Optimizing the Tax Benefit of Charitable Giving

By Steve Barrett
Thursday, March 1, 2018

Some of the do’s and don’ts of ensuring that donations are tax-deductible are well-known: Give to qualifying tax-exempt groups that are organized exclusively around religious, educational and some other specific purposes, but avoid donating to organizations involved in political activism.

Strategies for getting the biggest tax bang for the bucks donated may be less obvious.

Woodbury, New York-based Physician Financial Services notes several on its website:

  • If the value of the gift is greater than how much you are initially permitted to deduct for it, you have up to five years to carry forward the excess amount.
  • While there are some limits, you may be able to take an income tax deduction for premiums paid on a life insurance policy if you make the charitable organization the owner and beneficiary of the policy.
  • You might be able to avoid some capital gains taxes by making a charitable donation of certain highly appreciated assets, including stocks. As with designating a charity as the beneficiary of a life insurance policy, donations of these assets may ultimately allow you to make a larger contribution than you would otherwise be able to make in your current financial circumstances.