As you consider your charitable gifts between now and the end of the year, remember that gifts made now can generate income tax deductions that could help reduce your income tax bill. The amount you save depends on tax rates, how and when you give.
Consider the North Dakota Charitable Giving Tax Credit. Individuals and businesses are eligible for a 40 percent tax credit with a gift of $5,000 or more to MSA United Way’s Endowment Fund or other qualified endowment funds. When federal savings are taken into account, your gift of $10,000 could cost as little as $2,500. If the credit cannot all be used in one year, it can be carried forward for three additional tax years.
Congress recently passed legislation (H.R. 5771) to reinstate, retroactively, the IRA charitable rollover. Anyone over the age of 70-1/2 may take tax-free distributions of up to $100,000 from a traditional IRA if the money if distributed directly to an eligible charity.
Gifts of stocks, bonds and property may also be advantageous. Contact your financial advisor or tax professional to find out what situation is best for you.
Only gifts made by Dec. 31 can help reduce the amount of taxes you will owe next April.
For more information, visit msaunitedway.org or contact a financial advisor.