It is almost the middle of March, and here we are in the midst of another Tax Season. While we are working diligently to meet the needs of all our clients, we are also having a blast catching up with all of you.
Many of us here in our office often find ourselves discussing common trends or topics of conversation we are having with our clients. A recurring theme that has emerged early this year has been charitable giving. We often like to say that the correct answer to every tax question is “it depends”, and questions regarding charitable giving are no different.
Here are examples of common charitable giving topics we often discuss:
Qualified Charities: In order to receive a tax deduction your donations must be paid to a qualified charity registered as a 501(c)(3). GoFundeMe or Political donations are not tax-deductible.
Qualified Charitable Distributions (QCD): A QCD allows individuals aged 70.5 years or older to donate directly from their pre-tax IRA to a qualified charity. This is a commonly overlooked provision in the tax code by many charitable taxpayers. There are several key benefits to QCDs:
- They satisfy annual Required Minimum Distributions.
- The distribution is withdrawn without being taxed.
- The charity receives 100% of the benefit.
- Taxpayer's income is lower which is beneficial for managing the tax bracket, and also their income for determining Medicare Premiums (IRMAA).
Donor-Advised Funds (DAF): A DAF is a tax-advantaged charitable giving account that allows individuals to make contributions to a public charity, receive an immediate tax deduction, and then issue grants to qualified charities over time. The donor-advised fund can work wonders in the right situation. A common use for the DAF is when a taxpayer has an asset that has greatly appreciated in value, and when sold, would otherwise result in sizeable capital gains income and tax.
- That asset can be donated to a donor-advised fund and the taxpayer receives a tax-deduction for the fair market value at the time of the donation.
- Once held in the DAF, the asset can be sold without being taxed.
- The client can distribute charitable donations directly from their Donor-Advised Fund.
- The cash can also be invested for long-term growth which helps create a lasting legacy of charitable giving to the client’s most important causes.
Tracking Donations: Another common question we get asked often is how to value non-cash charitable donations. An outstanding new web-based solution for this is That’s A Write-Off (TAWO). TAWO is a web-based donation tracking application that helps taxpayers organize their charitable contributions year-round. Users can log cash, goods, mileage, stock, vehicle, and asset donations, store receipts, save charity information, and generate clean reports for tax filing. The platform also includes a built-in fair market value estimator for donated goods, which helps users assign reasonable values based on item type and condition. The result is a structured system that replaces rough estimates and missing documentation with organized, export-ready records, so taxpayers arrive at your tax appointment prepared and confident in the documentation of their charitable contributions. Feel free to give it a try:
Not only is charitable giving incredibly rewarding, but when done correctly, can have some incredible tax benefits as well. If you would like more information on any of these topics, please contact our office, or ask your tax preparer during your upcoming appointment.
Filing Deadlines:
The filing deadline for business tax returns (Forms 1065 and 1120S) is next Monday, March 16, 2026.
The filing deadline for individual income tax returns, C Corporations, and Trusts is Wednesday April 15, 2026.
If you have not filed your returns yet or need to schedule an appointment, please contact our office right away. Appointment times are filling fast. We also welcome you to mail-in, drop off, or submit your documents through our portal.
As always, we look forward to assisting you with your accounting, tax, or advisory needs. Please do not hesitate to contact our office if you need anything at all, and make sure to submit your documents or schedule your in-person appointment soon. Appointment times are filling fast.