For many families, the last two years have provided a rollercoaster of emotions, finances, schedules, and lifestyle. Throughout the same period, charities encountered new operational challenges and similar hardships. One thing remained strong throughout the first two years of the pandemic: the generosity of God’s people impacting ministries on a global scale. After another record year of generosity in 2021, The Signatry is excited to see what God has in store for the coming year.

Looking Ahead

Despite continued uncertainty for some sectors headed into 2022, the environment for charitable giving remains upbeat. The following factors have contributed to this sentiment:

Market performance: Although the market has been volatile, the “big 3” indices have shown strong growth. The S&P 500® index, DOW Jones Industrial Average, and Nasdaq Composite Index all gained over 20% in value in 2021. As a result, many investors have highly appreciated non-cash assets in their portfolios. This presents an excellent opportunity to give publicly traded securities, minimize taxes, and maximize the funds allocated for a donor’s favorite charity.

Tax benefits for charitable contributions: Current tax law offers deductions to donors who itemize taxes and contribute cash or appreciated non-cash assets held for more than a year. Donors may claim a tax deduction for non-cash asset gifts to qualified public charities and donor advised funds up to 30% of their adjusted gross income (AGI). The tax deduction limit for contributions of cash rises to 60% of one’s AGI. Donation amounts in excess of these limits may be carried over for up to five tax years.

As of now, there has been no announcement of any CARES Act charitable benefits continuing for 2022 contributions.

Giving More In 2022

There are a few main strategies to know as a donor seeking to maximize impact with their current assets in 2022.

GIVE APPRECIATED NON-CASH ASSETS INSTEAD OF CASH

For those who itemize deductions, giving capital assets such as stock, cryptocurrency, real estate, or business interest to a donor advised fund and then giving from the proceeds may maximize your generosity and minimize taxes. Beyond claiming a deduction for the fair market value of an asset, donors can potentially avoid the capital gains tax they would otherwise incur if they sold the asset and donated the cash proceeds. This can mean even more going to charity and less to taxes, as shown in the example below.

LEARN MORE:

https://thesignatry.com/how-to-maximize-your-charitable-impact-in-2022/