Five ways to decrease your tax liability and impact the kingdom of God by giving to the IM general fund
The end of the year is approaching, and with it comes the daunting task of reducing our tax bill. However, it is good to remember that our financial decisions can have far-reaching implications beyond our tax liabilities. By thinking and acting strategically, we can make a lasting impact on God’s kingdom while also reaping tax benefits.
Below, we have outlined five ways to decrease your tax liability and impact the kingdom of God by giving to the IM General Fund.
Give a cash gift to IM
First, the most straightforward way to lower your tax liability is to give a cash gift to IM. This simple and immediate gift allows you to directly support IM as an organization while receiving a tax deduction. This deduction can reduce your taxable income, potentially lowering your tax bracket and resulting in significant savings. Additionally, your contribution helps fund vital programs that advance IM’s goals, creating a positive impact beyond financial benefits.
Transferring gifts from your IRA
Second, you can minimize your tax bill while helping the General Fund that undergirds IM’s financial stability by transferring gifts from your IRA. Individuals aged 70 1/2 or older can transfer up to $105,000 from their IRA to a qualifying charity like IM, Inc. This transfer, a Qualified Charitable Distribution (QCD), excludes the amount from taxable income, effectively reducing your overall tax bill. Individuals may directly transfer funds to a charity from their IRA to satisfy their required minimum distribution without increasing their taxable income. This option benefits IM and allows individuals to fulfill their required minimum distribution (RMD) while avoiding income tax on the distribution.
Gift or transfer assets to IM
The third strategy is to gift or transfer assets to IM. Gifting securities, real estate, or other investments means avoiding capital gains tax and receiving a tax-saving charitable deduction. When you gift appreciated securities directly to a charity, you avoid capital gains tax on the increased value since purchase. This is because the charity can sell the securities without incurring tax This allows both the partner and the charity to maximize the value of the gift. As a result, partners can make a more significant contribution while also receiving a charitable deduction for the total market value of the securities. This can be particularly useful if you have highly appreciated assets you plan to sell.
Donor Advised Funds (DAFs) offer yet another tax-efficient option
Fourth, Donor Advised Funds (DAFs) offer yet another tax-efficient option. By making a tax-deductible gift to a DAF, you can contribute now and make future grants to your favorite charity, in this case, to IM. DAFs provide flexibility regarding when and how much you give, allowing you to manage your tax obligations strategically.
Zero-tax gift and sale arrangement
Lastly, a zero-tax gift and sale arrangement can be a powerful tool for reducing your tax bill. You can avoid capital gains tax by gifting a portion of an investment or property you intend to sell. In addition, you can receive cash in return. This allows you to maximize your charitable impact while saving on your tax
Please remember that tax planning should always be done in consultation with a qualified tax professional to ensure compliance and maximize your benefits. By leveraging these strategies, you can maximize your generosity while handling and decreasing your tax obligations.
End-of-year planning allows you to assess your financial situation and make strategic decisions that can lead to substantial tax savings. It also provides an opportunity to review your charitable contributions, retirement accounts, and investment strategies to ensure you are taking full advantage of available deductions and credits. Additionally, it can help you identify areas where adjustments are needed to align with your long-term financial goals, ultimately enhancing your financial well-being and philanthropic impact.
These are just a few creative, impactful ways for you to give to IM that will help both your financial needs and the financial needs of the Kingdom.
