Tax Updates and Giving Opportunities
As the year draws to a close, we wanted to share some tax-savvy opportunities to maximize your charitable gifts. Of course, please check with your financial advisor regarding any gift options!
Year-end giving strategies:
- “Bunch” charitable contributions to maximize itemized deductions
- Are your itemized deductions below the standard deduction for 2024? ($29,200 for couples or $14,600 for individuals). Consider “bunching” your charitable donations for multiple years into a single tax year, allowing you to maximize your deductions for the current tax year.
- Over 70 ½? Give from your IRA and lower your taxable income
- In 2024, eligible taxpayers can donate up to $105,000 from a traditional IRA tax-free to a qualified public charity, like Duke! Your gift will count toward your required minimum distribution if you are 73 or older. Learn more here: IRA qualified charitable distributions
- Donate highly appreciated stocks/bonds and minimize taxes
- If you’ve owned certain non-cash assets for at least one year, you may be able to donate them to charity and claim a charitable deduction for the current fair market value. You will avoid recognizing capital gains taxes – typically, 15% or 20%, depending on your income level – on asset appreciation. If you would like to supplement your income while also providing philanthropic support, consider donating appreciated assets to establish a charitable gift annuity or a charitable remainder unitrust.
And it’s never too early to think about next tax year! The IRS recently announced several tax updates for 2025.
Qualified Charitable Distributions – In 2025, the annual limit on qualified charitable distributions to charity will increase from $105,000 to $108,000 per accountholder. The individual limit on a QCD-funded gift annuity or charitable remainder trust will increase from $53,000 to $54,000.
Gift and estate tax exemption – Next year, the lifetime gift and estate tax exemption will increase to $13,990,000 per person ($27,980,000 for married couples). This exemption amount will also apply to generation skipping tax. These increased exemptions are slated to expire at the end of 2025, reverting to approximately $7,000,000. Donors who could be impacted by a lower exemption can take advantage of the current exemption levels by making gifts to charity before the provisions sunset in 2025. They will not lose the benefit of the higher exemption level if the exemption is subsequently reduced.
Annual gift tax exclusion – The annual gift tax exclusion will increase from $18,000 to $19,000.
Standard deduction – The standard deduction for married couples filing jointly will increase to $30,000. For married couples filing separately and single filers, it will increase to $15,000.
This information is provided with the understanding that neither Duke University nor the authors are providing legal, accounting, or other professional advice or counsel. Please consult your personal counsel about the financial, tax, and legal implications of any gift.
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