2024 Tax Rules and Tips for Easier, Cost-Effective Charitable Giving
At a time when so many people need help, there are many benefits — tax and philanthropic — to giving back.
Tax planning may be far from your mind as the holiday season kicks off with family gatherings and festive celebrations and work events. But if you plan to deduct donations on your 2024 tax return, these must be made by Dec. 31, 2024, and now is the time to take stock.
Have you already completed your charitable giving for the year? Or have you held off to take advantage of year-end matches? Maybe you've met your charitable goals but have room in your budget to give a bit more.
No matter where you are, there's still time left to give and many worthy causes and people needing support. With some careful planning now, you can maximize the impact of your charitable giving for others and yourself.
Deciding which charities to support is the first step. With so many to choose from, that's no easy task. But if you care about making a better world for children, UNICEF is worth considering for its holistic support and global reach. UNICEF addresses the root causes of issues children face with an innovative, expert approach to strengthening the systems they rely upon for support. And UNICEF delivers a wide range of vital services, including health care, education, water-sanitation, nutrition and much more.
As for tax planning, charitable contributions may be deductible if certain requirements are met — 2024's standard deduction and charitable contribution limits among them. Equally important: ensuring that the charity you wish to support appears in the IRS' tax exempt organization search tool, where you will find UNICEF USA and other qualified organizations.
The IRS also offers an online tax assistant (ITA) tool that answers common questions about rules governing charitable contributions. As a starting point for understanding basic tax rules and requirements, the ITA is helpful.
However, complex situations still require consultation with a tax professional or direct contact with the IRS. A financial advisor can also develop a tax-efficient strategy to maximize your charitable donations and impact.
2024 charitable contribution limits: how much giving is deductible?
To make charitable giving work for you in 2024, understanding the current tax regulations — especially the limitations on contributions — is essential. For the tax year ending on December 31, 2024, supporters of public charities may deduct their contributions as long as they itemize.
This year, donors may generally contribute up to 60 percent of their adjusted gross income (AGI) for donations of cash held for over a year. Contributions for non-cash assets are capped at 30 percent of AGI.
Should you itemize or take the standard deduction?
If your qualifying expenses exceed 2024's annual standard deduction amount, itemizing could lead to a more significant tax break. However, since the passage of the Tax Cuts and Jobs Act in 2017, annual increases of the standard deduction have made it attractive for many.
For the 2024 tax year, the standard deduction is $14,600 for single filers, including married people filing separately, and $29,200 for married couples filing jointly. Additionally, those 65 or older or blind can claim an extra standard deduction of $1,950 if filing individually or $1,550 per person if married and filing jointly.
For many, these increased thresholds might make itemizing less attractive. It's time-consuming, and the standard deduction, which generally rises with inflation, is enough for most people. But, if you want to claim deductions for charitable contributions, itemizing is a must.
How to make charitable giving work for you:
Of course, effective giving goes beyond knowing the rules. With guidance from an accountant and financial advisor, you may be able to optimize your charitable impact and tax benefits with these strategies:
- Bunch your donations: Combining two years of donations in a single tax year can push you over the standard deduction threshold, making itemizing worthwhile.
- Explore Donor-Advised Funds (DAFs): A DAF allows you to contribute to a charitable fund now, gain immediate tax advantages and decide on specific donations over time.
- Donate stocks and bonds: Giving appreciated assets like stocks can help minimize capital gains tax and maximize your charitable impact.
- Tap your IRA: If you're over 70 1/2, making qualified charitable distributions from an IRA can satisfy the required minimum distributions while offering tax benefits.
- Evaluate the overall impact: Consider both the tangible tax benefits and the broader impact your contributions will have on your chosen causes.
- Seek professional advice: A qualified financial professional can tailor these strategies to fit your financial goals and ensure compliance with current tax laws.
These strategies can enhance the benefits of your charitable giving while maximizing the tax advantages available in 2024. UNICEF USA's planned giving team can also provide expert advice and assistance if you wish to explore making UNICEF USA part of your estate planning strategy. Members of the planned giving team are also available for consultation. Contact UNICEF USA planned giving by filling out this form, calling (866) 486-4233 or sending an email to LegacyGifts@unicefusa.org
Bunch your 2024-2025 charitable donations for bigger deductions
Bunching your charitable donations entails combining two years of giving into one tax year — itemizing deductions in the year you donate and then taking the standard deduction the following year.
Bunching's effectiveness depends on an individual's tax situation. However, the primary advantage of bunching is the potential for a greater combined deduction across two years compared to claiming the standard deduction annually. Bunching may also accelerate charitable giving's impact by consolidating two years of donations into one year.
If you're opting to bunch donations for 2024 or considering it for 2025, consult your accountant first. Tax rules around income level, filing status and charitable contributions can change, affecting your 2024 tax return. Seek professional guidance to ensure you’re maximizing the financial and philanthropic benefits in 2024 and following a plan that aligns with your future giving and financial goals.
For longterm planning, UNICEF USA offers a downloadable estate planning tool kit for:
- setting family goals and creating a plan
- lessening tax burdens
- using trusts to support you, your family and loved ones.
- keeping a digital record of important information with everything organized in one place
- easily updating records
Donor-Advised Funds: flexible charitable giving options
Donor-Advised Funds (DAFs) are a flexible and tax-efficient way to make donations to IRS-qualified 501(c)(3) nonprofit organizations. Think of a Donor-Advised Fund as an investment account dedicated to charitable giving. You can contribute cash, stocks, bonds and other appreciated assets. Contributions typically qualify for a tax deduction in the year they’re made, but you can choose to allocate those donations over several years.
The sponsoring organization, which handles the investment and distribution details, simplifies the process for donors. Another benefit of DAFs: your contributions, which are invested, can grow tax-free.
Many financial institutions, including Fidelity, Schwab and Vanguard, offer DAFs. In fact, current clients who already have DAF accounts with Fidelity Charitable, Schwab Charitable, Vanguard Charitable and others can make a designation directly from UNICEF USA's Donor-Advised Fund page. Fees and minimums vary by institution, so clarify these upfront.
Learn more about supporting UNICEF USA via a Donor-Advised Fund.
Taxpayers over 70½: maximize charitable contributions with your IRA
For taxpayers aged 70 1/2 and older, 2024 offers enhanced options to maximize charitable giving while optimizing your tax benefits.
- Qualified charitable distributions (QCDs): QCDs offer a tax-efficient way to support UNICEF USA's mission while satisfying your required minimum distribution. QCDs count toward your required minimum distribution (RMD), typically taxed as income, allowing you to donate directly from your IRA to a qualified charity while reducing your taxable income. While you can make these charitable gifts in any amount up to the annual limit — $105,000 for 2024 — always verify limits with current IRS guidelines or your tax advisor as they may change annually.
- One-time distribution opportunity of $53,000: New for 2024, eligible taxpayers can distribute up to $53,000 from their IRA to fund a charitable gift annuity. With a charitable gift annuity to, say, UNICEF USA, you make a gift. UNICEF USA then agrees to pay you (or someone else, if you choose) a fixed amount each year for the rest of your life. The balance is used to support UNICEF's work. You may qualify for various tax benefits depending on how you fund your gift, so check with an expert.
Things to know: The $53,000 distribution can only be made once in a donor's lifetime; spouses may also exercise this option during the same calendar year or at a later date. The QCD or charitable gift annuity cannot be taken as a federal charitable income tax deduction.
Before taking any steps, consult your tax advisor to see which strategy best suits your financial goals. For further guidance on IRA rollovers, explore detailed instructions here.
Donate stocks and bonds
Donating appreciated securities is another highly tax-efficient way to make charitable gifts. When you transfer ownership of qualifying long-term appreciated assets, such as stocks or bonds, you can claim a charitable deduction equal to the full current market value of those assets.
The key benefit of donating stocks and bonds is that you avoid paying capital gains tax on the appreciation. This means your donation can go further to support UNICEF's vital work. You could also receive a more substantial tax deduction than you would if you donated cash.
However, it's important to note that there are IRS limits on the donations you can deduct each year. Your tax advisor can help ensure you maximize the tax benefits while staying within the applicable deduction limits.
Learn more about donating appreciated securities to UNICEF USA.
Support children's happiness through tax-deductible donations
Giving to UNICEF USA is the most effective way to make lasting change for children. If you have kids of your own, it's also a great way to nurture their future happiness and generosity. Research from Fidelity Charitable shows that 45 percent of individuals raised with strong giving traditions go on to donate $5,000 or more annually as adults. They also report being happier.
Every day, UNICEF works hard around the world — in some of the toughest places — to help protect and uplift children. By donating to UNICEF USA, you can be there every step of the way, helping too.
HOW TO HELP
There are many ways to make a difference
War, famine, poverty, natural disasters — threats to the world's children keep coming. But UNICEF won't stop working to keep children healthy and safe.
UNICEF works in over 190 countries and territories — more places than any other children's organization. UNICEF has the world's largest humanitarian warehouse and, when disaster strikes, can get supplies almost anywhere within 72 hours. Constantly innovating, always advocating for a better world for children, UNICEF works to ensure that every child can grow up healthy, educated, protected and respected.
Would you like to help give all children the opportunity to reach their full potential? There are many ways to get involved.
