Brenda Quinn, EA •
As the end of 2024 draws near, many people are embracing the season of giving. Whether you’re considering personal gifts for friends and family or thinking about making a meaningful contribution to charitable organizations, now is the perfect time to plan ahead. Please find some information below related to gifting.
As the end of 2024 draws near, many people are embracing the season of giving. Whether you’re considering personal gifts for friends and family or thinking about making a meaningful contribution to charitable organizations, now is the perfect time to plan ahead. Please find some information below related to gifting.
- You can give any person up to $18,000 as a gift and it is not taxable to you or the recipient. This is the annual exclusion for 2024 and it does not require filing a gift tax return.
- If you have a Required Minimum Distribution (RMD), you can have it transferred from your IRA directly to a charity without having to first pay any tax on the distribution. The amount of transfer is up to $105,000 to a public 501(c)(3) charity. This is especially prudent tax wise if you cannot itemize deductions.
- You may want to fund your children’s or grandchildren’s future education. You can gift to a 529 Education Plan Account and even pre-fund it with a 5 year contribution up to $85,000 per recipient. Example: if you give $50,000 this is spread out as $10,000 per year over the 5 years. A gift tax return is required if any amount per recipient exceeds $18,000 in 2024.
- You can set up a charitable donor-advised fund and fund this account with appreciated securities or cash and the (FMV) fair market value is your charitable deduction. You typically will receive a charitable deduction in the year you contribute funds and you avoid capital gains on the appreciated value.
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