Giving thanks and leveraging our gifts

As we celebrate Thanksgiving and the end of year holidays, giving to others comes into sharper focus.

Many of us are fortunate and have many reasons to be thankful. Gifts of our time, skills or money can assist individuals, institutions in the community or people we personally know. These gifts can help to raise everyone to a higher level. If think about how we give, we can leverage our financial gifts and increase the benefits to all.

You can start by seeing if your cause has a plan where another donor will match the gift. This can result in doubling your contribution. You can check with the organization, your employer, community foundations or the media to find out what matching plans are available. Obviously, the recipient will see a greater benefit; however, the giver also benefits as their cause now has more resources available.

Another way to leverage your giving is by reducing your tax burden. Depending upon how you report your deductions when filing income taxes, you may be able to deduct some of your contributions. Although obtaining a tax deduction is not the reason for giving, it can be a significant benefit. The deduction will be different depending on whether you give cash, securities or other assets, and the organization to which you are giving. Cash is easy to value for tax purposes.

However, if you have securities or other assets, such as a car, you need to look at the appreciated value, cost basis or market value to determine how

much you can deduct. The type of organization (religious, educational or community), the mission and how it is organized will impact how much can be deducted. For example, if you give a painting to a human services 501(c)(3) for auction, the deduction may be different than if the painting had been given to an art museum that displays it. Although it may take some effort to give non-cash assets, if it allows you to give more and receive a greater tax break, it may be worth the effort for both parties. If you want to accomplish this in 2015, the time to start the process is now. Obtaining an assessment of the market value is a good place to start.

If you are 70 1/2 or older, there may be another way to leverage contributions and reduce your tax bill. Over the past few years you have been able to donate directly from your Traditional IRA to a charity and not have it be counted as income to you. For those whose Required Minimum Distributions are higher than the income they require, this can be a benefit. The problem is that this provision has lapsed and we don't know if it will be reinstated for 2015. Even if the preferable tax treatment is not reinstated, making direct contributions to charity from your IRA will at worst show as income and a deductible gift. The donation must come directly from the IRA to the charity and meet other IRS requirements. It is best to contact your IRA custodian to assure it is done correctly.

The Internet has made it easier to collaborate on giving.

If cannot find a local cause that you want to support, you can find Giving Circles online. Like-minded people create groups to leverage their smaller contributions and increase the benefit to their causes. This can be an easy way to leverage a large number of smaller gifts. Before giving to any organization, do your research to assure they will utilize your gift towards the stated mission and not other uses. Doing your homework assures you are maximizing the impact of your contributions.

For those who volunteer their time, you can deduct gas costs or mileage ($0.14 per mile), some meals and expenses associated with attending conventions or other events that are not for pleasure. Before completing your tax return, check IRS Publication 526 for allowed deductions or with your tax preparer.

This week, as we give thanks and celebrate Thanksgiving, think about what you can do to help others. You can increase the value of your financial gifts by taking a few simple steps to leverage your contributions. Take the time to make the most of your gifts.

Tom Roberts, a financial planner and owner of A New Approach Financial Planning in Lakewood Ranch, can be reached at 941-927-9590 or by email at Tom@ANewApproachFP.com.

This story was originally published November 23, 2015 at 11:42 PM with the headline "Giving thanks and leveraging our gifts ."