So Long, 2022! Celebrate With Tax Savings
As you get ready to toast the new year, consider these smart ways to wrap up 2022 on a financial high note. Not only can you save on your taxes, but you can also make a huge impact at UCSB.
Contribute appreciated stock instead of cash.
If you have owned a stock for more than one year and it has grown in value, you may be in line for two tax benefits: avoid taxes on the appreciated value and qualify for an income tax charitable deduction based on today’s market value when you itemize.
You will enjoy the same benefits with a gift of appreciated cryptocurrency.
You receive the same tax saving as if you wrote a check, but with the added benefit of eliminating capital gains taxes.
Timing: Complete all transfers by Dec. 31. This includes by mail, electronic transfer or hand-delivery of the assets.
Sell depreciated assets and donate the cash.
Unfortunately, 2022 wasn’t good for all portfolios. If you would like to support UCSB but your stocks or cryptocurrency have fallen in value, it is best to sell them first and then donate the cash. This allows you to record the loss as a tax deduction and qualify for an income tax deduction for the gift.
Timing: Complete all transfers and cash donations by Dec. 31.
Open a donor advised fund account.
Contribute to a donor advised fund and enjoy a tax savings on that amount when you itemize.
Timing: Complete the contribution by Dec. 31. You do not have to designate the funds this calendar year to receive the tax benefits.
Make a qualified charitable distribution of IRA assets.
If you are 70½ or older, you can give any amount up to $100,000 per year from your IRA directly to the UC Santa Barbara Foundation. You will not pay income taxes on the transfer. If you are required to take minimum distributions, you can use this transfer to satisfy all or part of your obligation.
Timing: We must receive your gift by Dec. 31 for your donation to qualify this year. If you have check-writing features on your IRA, please be aware that your check must clear your account by Dec. 31 to count toward your required minimum distribution for the calendar year.
Help offset the tax liability on a retirement account withdrawal.
If you are 59½ or older, you can take a distribution from your retirement plan account and then make a gift to the UC Santa Barbara Foundation without an early withdrawal penalty. If you itemize your deductions, you can take a charitable deduction for the amount.
Timing: If your gift is in the form of a check, it must be postmarked on or before Dec. 31 for your donation to qualify this year.
How to Make a Tribute Gift
Any year-end gift can be made in a loved one’s name. This can be a heartfelt way to celebrate someone important in your life or to remember someone.
The Countdown Is On
As we approach the end of the year, we are happy to help ensure that you realize the greatest benefit for your hard-earned assets. Please contact Ilana Ormond at 805-893-5556 or email@example.com.
Information contained herein was accurate at the time of posting. The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Figures cited in any examples are for illustrative purposes only. References to tax rates include federal taxes only and are subject to change. State law may further impact your individual results. California residents: Annuities are subject to regulation by the State of California. Payments under such agreements, however, are not protected or otherwise guaranteed by any government agency or the California Life and Health Insurance Guarantee Association. Oklahoma residents: A charitable gift annuity is not regulated by the Oklahoma Insurance Department and is not protected by a guaranty association affiliated with the Oklahoma Insurance Department. South Dakota residents: Charitable gift annuities are not regulated by and are not under the jurisdiction of the South Dakota Division of Insurance.