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How to Maximize Your Charitable Giving

How to Maximize Your Charitable Giving 

By Wealth Management Solutions 

It’s easy for us to get distracted in our pursuit of our personal financial security. We often lose sight of the impact charitable giving can have on our communities in addition to our own financial well-being. 

Incorporating charitable giving into a comprehensive financial planning and wealth management strategy can bring unexpected benefits: aligning your values with your financial goals, fostering a sense of purpose, and building a legacy that goes far beyond your lifetime.

Let’s take a closer look at how Wealth Management Solutions can partner with you to maximize your charitable giving.

Discover All the Ways to Give

When planning your giving, the more intentional you are, the better. Donating to a charity can be personally fulfilling, but there are also tax benefits to take advantage of through comprehensive financial planning strategies. 

For example, charitable giving is tax-deductible, but only if you itemize your deduction. When you take the standard deduction, your charitable giving has no effect on your taxes. So, before simply writing a check to support your favorite charity, consider incorporating one of these giving strategies to maximize your generosity. 

  • Donor-advised funds (DAF) are charitable giving programs that allow you to combine the tax benefits of giving with the flexibility to support your favorite charities. Contributions to your DAF provide a current year’s tax deduction and are then invested to grow tax-free. Once the money is out of your hands, you don’t have legal control over it. But you are the decision-maker regarding how the funds are invested and when they are distributed to the charities you recommend. According to the legal setup of these accounts, the organization that holds your DAF isn’t required to follow your “advice,” but there’s an understanding that they will. 
  • A qualified charitable distribution is a distribution made from your IRA account directly to your charity of choice. It can count toward your required minimum distribution (RMD) for the year and it doesn’t count toward taxable income. This can be a great strategy for those with sufficient income streams who don’t want to pay excessive taxes.
  • A charitable remainder trust (CRT) is a trust that provides an income stream and passes the remaining value to charities of your choice when you or your beneficiary dies. It allows you to convert an appreciated asset into lifetime income. It also provides other important tax benefits and—best of all—you get to contribute to charitable causes you care about. And unlike DAFs, you always have control of the trust. Your trustee manages the assets but they have to follow your instructions and make changes according to your direction.

If you need more direction on which strategy is ideal for your situation, our team can offer our insights to guide you to the best choice.

Stay Organized

All of your charitable contributions can be filed with your taxes, qualifying you for certain tax deductions and lowering your overall tax bill. Always ask for a receipt anytime you give a donation (cash or non-cash) and file it safely with the rest of your financial documents and with your financial professional. Come tax season, bring your receipts and paperwork to your CPA so you can get an accurate picture as to which tax deductions you qualify for. Always include a copy of your receipts with your tax forms as proof. 

Which Strategy Will You Use? 

Do you feel like the Federal Government is your default charity? We get it! Because everyone’s circumstances are unique, a cookie-cutter formula won’t work. And depending on the current state of your financial portfolio, there may be other ways to maximize your charitable contributions even more. You need a giving strategy designed just for you. 

If you need guidance to find better ways to maximize your charitable giving to line up with your tax strategies, we at Wealth Management Solutions can assist. Allow us to design your own personal planned giving strategy to reduce the amount of taxes you pay and control where your charitable giving goes. Schedule a complimentary consultation by contacting us at (949) 475-9700 or info@wms-llc.com, and let us show you how our planning can help build your future.

About Wealth Management Solutions

The story of origin: Wealth Management Solutions was created in 2003, following the personal family tragedy felt by the founding partner of the firm. Richard Riva lost his father unexpectedly and before any legacy planning was done that could have extended his family’s legacy beyond the fourth generation. Our partners and team members all share similar experiences due to a lack of planning for their families and are committed to our clients not experiencing the loss of their legacies due to a lack of planning. This is why we say: Our Planning; Your Future. 

All investing involves risk, including loss of principal. No strategy assures success or protects against loss.

The opinions voiced in this material are for general information only and are not intended to provide specific investment advice or recommendations for any individual. 


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