Minimize Your Taxes – Maximize Your Support of CBA
By Elizabeth Taraski, CBA Special Gifts Officer
In recent article posted by Forbes, Simple Tips to Maximize the Tax Benefits of Your Charitable Giving, several strategies that could impact a donors tax responsibilities were outlined. Since the Tax Cuts and Jobs Act of 2017, fewer donors receive deductions for their charitable gifts. But with some planning, you may be eligible to receive a greater tax benefit for your generosity this year. By using proper tax planning strategies, charitable contributions can reduce three kinds of federal taxes: income, capital gains and estate taxes. Here are some tips to keep in mind as you give this year. Note: It is important to consult with your financial, tax and planning advisors to ensure that you qualify and are following IRS policies and procedures.
Long-term appreciated assets: If you donate long-term appreciated assets like bonds, stocks or real estate to charity, you generally don’t have to pay capital gains tax, and you can take an income tax deduction for the full fair-market value.
Combine multi-year deductions into one year: Many taxpayers won’t qualify for the necessary deductions to surpass the standard deduction threshold. However, you can still receive a tax benefit by “bundling” multiple years’ worth of charitable giving in one year to surpass the itemization threshold. In off-years, you take the standard deduction.
CBA Planned Giving Society: By naming Chesapeake Bay Academy in your will or as a beneficiary of a qualified insurance policy, retirement plan or trust, you reduce or even eliminate the burden of estate tax for your heirs. (It is important to consult your tax and estate planning advisors regarding modifications to your estate plans.)
Retirement Assets from your IRA – Typically, if you donate from your IRA, you would withdraw funds, pay the tax, and then make a donation. However, there is an exception: If you are 70 ½ years of age or older, a qualified charitable distribution allows you to rollover funds directly from your IRA to Chesapeake Bay Academy as a qualified charity.
Save Money While Supporting CBA’s Scholarship Program
Many children who learn differently are in need of some extra financial support to attend Chesapeake Bay Academy (CBA). CBA participates in the Neighborhood Assistance Tax Credit Program (NAP) and the Education Improvement Scholarships Tax Credit Program (EISTCP) through the Virginia Foundation for Learning Disabled Students (VFLDS). Gifts directed for the purpose of providing scholarships to low-income, learning-disabled students may be eligible for Virginia state tax credits up to 65%. CBA is pleased to offer this benefit to our donors, as credits are available.
The Education Improvement Scholarships Tax Credits program increases private school access for Virginia’s children in need. It offers a 65% state tax credit on top of current state and federal tax deductions for monetary and marketable securities donations to nonprofits that, in turn, provide private school scholarships.
Chesapeake Bay Academy, through the Virginia Foundation for LD Students (VFLDS), provides scholarships to students meeting the prescribed criteria as defined by the Virginia Department of Education for the Education Improvement Scholarship Tax Credits.
Requirements for eligibility can be found on the Virginia Department of Education website at: https://law.lis.virginia.gov/vacode/58.1-439.25/
Interested in learning more about ways that your donation could make and impact as well as save you money? Contact Cami Best-Jones, director of development, at cbestjones@cba-va.org or 757.747.1673.