Tax Savings

There are many thoughtful financial & tax planning strategies in 2012 to assist you in saving taxes and increasing income on your gifting. Here are 5 Tips on ways to save taxes and increase income on your gifting.

1) A Donor Advised Fun (DAF) is a smart, popular and simple way to gift. A DAF allows you to aggregate your charitable contributions in any one year, even if your intent is to spread the donations out over various charities through time. DAF's require as little as $5,000 to fund, can maximize your tax savings while giving you time to make your decisions on where the funds will go, serve as a vehicle to directly donate appreciated stocks and mutual funds to, and allow you to conduct on-line research, track gifting and control your own charitable fund.

2) There will be no reduction on the amount of the itemized deductions you can take for 2012 charitable contributions up to your Adjusted Gross Income (AGI) limit (50% for cash donations; 30% for securities - if the contribution is made to qualified charities).

3) If you make a charitable donation and receive goods or services in exchange, you should generally receive a written disclosure statement from the organization estimating the fair market value of the goods or services you receive. The rest of your donation may be tax-deductible.

4) Designating a Charitable Remainder Trust or another tax shelter vehicle may reduce the amount of inheritance tax your family will have to pay, provide a large tax deduction and provide high annual income for life to the donor.

5) Although you cannot deduct the value of your services given to a charity, you may be able to deduct some amounts you pay in giving services to a qualified organization. The amounts must be: unreimbursed, directly connected with the services, expenses you had only because the services you gave, and not personal, living, or family expenses. Out-of-pocket expenses such as travel, meal ingredients for food prepared for a shelter, or holiday gifts purchased for Walden foster children can add up over time. If you drive your car on behalf of a charity in 2012, you can deduct 14 cents per mile. Keep your receipts. If your contributions total more than $250 for the year, you'll need an acknowledgement from the charity documenting the services you provided.

Smart gifting decisions require smart planning. We encourage you to speak with a financial or tax expert on appropriate ways to benefit you, your family and help Walden Family Services support foster youth and families. If you require direction, please contact Teresa Stivers at tstivers@waldenfamily.org or call (619) 727-5881.