The holidays are here—a season filled with warmth, family, and giving. Whether you're donating to a favorite cause or helping out loved ones, deciding how to give can feel a little overwhelming. But don't worry—I'll walk you through some smart ways to give that align with your financial goals.
Let's explore gifting strategies, from supporting charities to helping family members, with practical tips to make the most of your generosity.
Where to Start with Charitable Giving This Holiday Season
If you're planning to donate to a nonprofit, think about which charitable giving vehicle fits your goals. Here are some of the most popular options:
What Is an Outright Gift?
The simplest way to give is through an outright gift of cash or property. Charities get the funds immediately, and you may qualify for a tax deduction—just remember to keep those receipts!
What’s a Donor-Advised Fund and Why Do People Use Them?
Donor-advised funds allow you to contribute money, get an immediate tax deduction, and recommend how the funds are distributed over time. These funds make giving easy, but watch out for administrative fees that might reduce what reaches your chosen charity.
Advanced Charitable Giving Tools to Consider
What Is a Charitable Remainder Trust?
These let you give assets to charity while keeping some income for yourself. They're complex but offer tax benefits and long-term giving flexibility.
Charitable Gift Annuities
Want guaranteed income* and to help a charity? This option could be for you.
Hint: Trusts and annuities usually require professional setup.
Gifting to Family: Tax-Smart Ways to Help Loved Ones
Giving doesn't always mean donating to charity—helping family members can be just as meaningful.
How Much Can You Gift in 2024 Without Triggering Gift Tax?
For 2024, you can give up to $18,000 per person (or $36,000 for couples) without triggering gift taxes. Want to give more? You'll need to file a gift tax return.
Can You Pay Tuition or Medical Expenses Without Gift Tax?
If you pay a loved one's tuition or medical bills directly, there's no limit—and you can still gift up to $18,000 tax-free.
How Do 529 College Savings Plan Contributions Work?
Planning to help with education? Contributions to a 529 college savings plan grow tax-free and allow for front-loading up to five years of gifts at once (up to $90,000 per person in 2024).
👉 Note: You cannot make any additional gifts to that same beneficiary during the five-year period without it counting toward your lifetime gift tax exclusion.
Year-End Gifting Tips to Maximize Impact and Tax Benefits
- Keep Records: Documentation is essential, especially for tax purposes.
- Talk to a Pro: Complex strategies, like trusts or large gifts, often require expert guidance.
- Consider Timing: End-of-year gifts can make a difference for you and your recipients.
Let’s Create a Gifting Plan That Fits Your Financial Goals
Choosing the right gifting strategy is key to making the most of your generosity. Whether you're donating to a cause close to your heart or helping family members, it's important to align your giving with your financial plan. Let us help you make the most of this season of giving. Schedule an introductory meeting today!
*Guarantees are based on the claims-paying ability of the issuer.
Tom Hine is a CERTIFIED FINANCIAL PLANNER® professional and owner of Capital Wealth Management. With over 30 years of experience, Tom works with individuals and families on financial planning, retirement strategies, and investment management. He has a particular passion for special needs financial planning, shaped by his personal experience helping raise his sister Amy, who was born with a severe chromosomal condition. Tom understands the emotional and financial challenges that come with caring for a loved one with disabilities and helps clients navigate complex issues like preserving government benefit eligibility, coordinating Special Needs Trusts and ABLE accounts, and long-term care planning. With offices in Glastonbury and Wilton, CT, Tom serves clients across Connecticut and throughout the U.S. Schedule a complimentary introductory meeting with Tom.
This information has been obtained from sources considered to be reliable, but we do not guarantee that the foregoing material is accurate or complete, it is not a statement of all available data necessary for making an investment decision and it does not constitute a recommendation. RMD's are generally subject to federal income tax and may be subject to state taxes. Please note, changes in tax laws may occur at any time and could have a substantial impact upon each person's situation. While we are familiar with the tax provisions of the issues presented herein, as Financial Advisors of RJFS, we are not qualified to render advice on tax or legal matters. You should discuss tax or legal matters with the appropriate professional. Any opinions are those of the author, and not necessarily those of Raymond James. Expressions of opinion are as of this date and are subject to change without notice.
Donors are urged to consult their attorneys, accountants or tax advisors with respect to questions relating to the deductibility of various types of contributions to a Donor-Advised Fund for federal and state tax purposes.
529 plans come with fees and expenses, and there is a risk they may lose money or underperform. Most states offer their own 529 programs, which may provide benefits exclusively for their residents. Please consider whether the state plan offers any tax or other benefits. Tax implications can vary significantly from state to state.