CFP Board Offers Tax Tips for Charitable Contributions

But aSchlesinger highlights strategies available to make contributions pay off for both donor and recipient. Bundling future years' contributions, for instance, can create a big enough pool of money to justify itemizing in the current year.

Another method is to gift appreciated securities from a taxable investment account, which allows the donor to write off the current market value — not just the purchase price — and avoid taxes on the accumulated gains.

Payments must be sent, and postmarked, prior to midnight on Dec. 31, or they won't be counted for this year. The date on the check doesn't weigh with the IRS, nor does a pledge that hasn't been fulfilled. Credit card donations, too, bear watching, because the donation counts as of the date the account is charged.

Last but not least is a qualified charitable distribution from a retirement plan for those 70½ or older. QCDs allow the redirection of a required minimum distribution to a public charity. And while they don't qualify as an itemized charitable deduction, QCDs do let donors avoid tax on the money and also help to minimize adjusted gross income as well as affecting a number of benefits like Medicare premiums.

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