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November 2, 2019

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‘Tis the Season of Giving

Greg_Mattacola_Bio_Half Greg Mattacola | Articles

Read Time: 2:00 min

Toys for Tots

‘Tis the Season of Giving: Financial Advisor Greg Mattacola discusses the many benefits of charitable gifting.

By the time this column hits the press, the Halloween costumes will have been put away and the jack-o-lanterns will have become squirrel fodder. And then, onto the next holiday. But which one?

Each year, it seems like Thanksgiving gets more overlooked as Christmas craziness starts earlier and earlier. Yet, let’s not give it short shrift; instead, let’s seize the opportunity to touch upon the benefits of service and charitable giving.

There are many ways to serve and give — delivering meals to shut-ins, volunteering at a homeless shelter or soup kitchen, participating in a clothing or toy drive, assisting returning veterans in re-employment efforts – the list is endless.

People give for a multitude of reasons – because they have a personal connection to the cause; because they want to help support and better their community; to instill character and values in their children or simply to feel good about assisting others. There is no wrong reason here.

In addition to physically helping, there are a vast number of not-for-profits who need our financial assistance as well. Not only does this help the charity, it can have many benefits to your financial picture as well:

If you itemize deductions on your tax return, charitable donations can help you lower your taxable income, thereby reducing the amount you pay in taxes. I don’t know about you, but I feel like I “gift” plenty to Uncle Sam and New York State. Reducing some of that for the benefit of a more local and personal cause is always appealing.

Gifting can help you deal with capital gains taxes. Perhaps you have some stocks which you bought at a very low basis or you received as equity compensation and the value has doubled or tripled. Gifting stocks to qualified charities can help you avoid paying those capital gains.

Greg Mattacola

 

If your estate is subject to estate tax, gifting assets can help reduce the size of your taxable estate. Federal estate tax rates can be as high as 40%. While the estate tax exemption limits are currently very high ($11.4 million federal exemption if you are a single filer/$5,740,000 per person in NYS); if your wealth falls above that, gifting is a very attractive option.

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Gifting can help you deal with capital gains taxes. Perhaps you have some stocks which you bought at a very low basis or you received as equity compensation and the value has doubled or tripled. Gifting stocks to qualified charities can help you avoid paying those capital gains.

After the turkey and pie, it’s nice to take a moment to think of your blessings and those in need and how you may help. When doing that, remember that there is certainly nothing wrong with making your gift also work for you financially. It’s well worth it to consult your accountant and financial advisor to ensure that you are giving in a way that maximizes the benefits for all parties.

Last note: when exploring charities and which ones are worthy of your dollars – there are web sites like GuideStar which evaluate and score charities on how many of the dollars they raise are actually going to the stated mission. It’s worth a look to ensure the best use of your charitable dollars. Live well, live with love, until next time.

 

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Original content provided by Gregory Mattacola, Esq., Financial Advisor at Strategic Financial Services. Content is provided for educational purposes only and should not be used as the basis upon which to make investment or financial decisions. The reader may not rely on this article as the basis to make a tax decision. Consult a tax professional for assistance with your specific needs.

About Strategic

Founded in 1979, Strategic is a leading investment and wealth management firm managing and advising on client assets over $1.3 billion.

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