By Carrie Ogami
When considering year-end charitable gifts, including to Punahou, here are things to keep in mind regarding year-end tax planning.
» For the 2021 tax year, those who don’t itemize their deductions can still deduct cash donations up to $300 for single filers and $600 for married couples filing jointly. The deadline to take advantage of this special deduction is Dec. 31, 2021.
» To make a charitable gift that won’t be diminished by taxes, consider donating appreciated stock, which won’t require paying capital gains on the transfer. Taxpayers who itemize can take a full income tax deduction for the entire stock value.
» Taxpayers won’t need to itemize deductions to achieve significant tax savings when making a gift from an IRA. Those 70 ½ or older can make a Qualified Charitable Distribution (QCD) directly from their IRA and avoid income tax on the distribution. Like stock gifts, QCDs use pre-tax dollars to support recipients like Punahou. Note: Those 72 years old or older with an IRA should take the required minimum distribution before the end of the year to avoid a 50% penalty.
» Those with nearly enough deductions to itemize their returns ($12,550 for single taxpayers; $18,800 for head of households; and $25,100 for married filing jointly), can combine future contributions to meet the standard deduction threshold. A tax deductible gift to a Donor Advised Fund can reduce taxable income and allow for charitable gifts to be spread over future years.
*This information is not intended as tax, legal or financial advice. Please consult your personal financial advisor for specific information related to your situation.
For more information about gift planning at Punahou, please call Carrie Ogami, director of Gift Planning, at 808.944.5845 or email cogami@punahou.edu