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‘Tis The Season To Give



The 2023 Holiday season is here, so cue the Hallmark movies, festive lights and decor, and family get-togethers. While unpacking and preparing your home for guests and celebrations, don't forget to take out the family heirlooms that will remind you of years past and years to come. Many people say the Holiday season is the merriest time of the year, and I agree. More importantly, though, I also find it to be when people are the most caring and generous; it helps that the tax year ends on December 31st for donations! So, with giving in mind, the Lundeen Abrams Advisors team wants to share our two favorite ways to give back to those in need from a financial planner's perspective. Sharing Your RMD With Those In Need Traditional IRAs are a great way to save for retirement since they allow you to defer taxes until later in life. However, you must begin taking disbursements once you turn 72 (or 73 starting in 2024) so Uncle Sam can begin collecting tax revenue from your savings. These disbursements are known as Required Minimum Distributions (RMDs), vary based on your savings and age, and are taxable. Many of our clients do not need the additional income their RMD provides every year, which can make Qualified Charitable Distributions (QCD) a great option to help others. Using this strategy, clients send their RMD directly from their IRA to a 501(c)(3) charity without reporting the distribution as income on their tax returns, benefiting the charity with a larger tax-free donation since no tax withholdings are necessary for the donor. Donating Appreciated Securities For those not at RMD age or who have appreciated investments in a brokerage account, donating securities such as stocks, ETFs, mutual funds, or even cryptocurrency directly to a charity is another great option to consider. Using this strategy, an investor can give their investments directly to a charity instead of selling them first, preventing a taxable event for the donor if the asset has appreciated substantially. Then, the charity liquidates the investment without tax consequences, meaning the donor can make their donation more impactful! How Will You Give While QCDs and donating appreciated securities are our favorite ways to give back from a financial planner's perspective, many other charitable options exist. If you are interested in learning more about these charitable donation strategies and others, please contact us so we can schedule a time to speak before the year ends!

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