3 Tax-Smart Giving Strategies for 2022
Now that the tax filing season is over, it’s time to start thinking about how you can maximize your tax-deductible donations in 2022 while supporting Silver Cross Hospital.
1. Make a qualified charitable distribution of IRA assets
Whether itemizing deductions or taking the standard deduction, individuals age 70½ and older can direct up to $100,000 per year tax-free from their IRAs to the Silver Cross Foundation through qualified charitable distributions (QCD). Because the IRA income goes directly to charity, you do not report the QCD as taxable income and do not owe any taxes on the QCD, which may be particularly beneficial to you if you are forced to take required minimum distributions (RMDs) and don't need the extra money. In addition to avoiding taxable income, your IRA distribution can be put to good use at Silver Cross Hospital to expand services or help pay the utility bills! It's truly a win-win option. By reducing the IRA balance, a QCD may also reduce your taxable income in future years, lower your taxable estate, and limit IRA beneficiaries' tax liability.
2. Contribute appreciated stocks instead of cash
One of the most effective tax-smart strategies for achieving maximum charitable impact is donating appreciated stock held more than one year to the Silver Cross Foundation. Donors who use this strategy can generally eliminate the capital gains tax they would otherwise incur if they sold the assets first and then donated the proceeds. Eliminating the capital gains tax—15% or 20%, depending on your income level—can increase the amount available for Silver Cross to invest in patient care by up to 20%. Plus, you are still eligible to deduct the full fair-market value of the asset you donated from your income taxes up to the overall amount allowed by the IRS. For stock transfer information, contact Tracy Simons, Executive Director of the Silver Cross Foundation, at (815) 300-7113.
3. Bunch two years of donations into 2022
You may find that the total of your itemized deductions for 2022 will be slightly below the level of the standard deduction—$12,950 for single filers and $25,900 for married couples filing jointly. In that circumstance, it could be beneficial to combine or “bunch” 2022 and 2023 charitable donations into one year (2022), itemize deductions on your 2022 tax returns, and take the standard deduction on 2023 taxes. In addition to achieving a large charitable impact in 2022, this strategy could produce a larger two-year deduction than two separate years of itemized deductions, depending on income level, tax filing status, and giving amounts each year.
For more information, contact the Silver Cross Foundation or talk with a financial planner or accountant.
To make a donation, send your check payable to the Silver Cross Foundation at 1900 Silver Cross Bvd., New Lenox, IL 60451 or click here.