Charitable giving allows people to support organizations and causes they care about. Making charitable contributions can also offer tax benefits to people in Connecticut. Charitable gifts can help to reduce income taxes by providing deductions and might also help people to cut their estate and capital gains tax bills down.
Ways to make charitable contributions
There are several ways that people can make charitable contributions that can provide them with tax benefits while also allowing them to support the causes in which they believe. Each of the different ways to donate to charity offers different benefits. Some of the ways to give to charity include the following:
- Contributing to donor-advised funds – Allows people to direct how their contributions should be used
- Donating real estate – Helps to reduce the size of an estate to reduce estate taxes while also providing a deduction of up to the home’s fair market value
- Cash donations – Allows people to deduct the amount of cash donated from their income taxes
- Stock donations – Helps people to avoid capital gains taxes while allowing them to deduct up to the fair market value of the stock
- Establishing a charitable lead trust – Provides a steady stream of income to the charitable organization beneficiary while providing a gift tax deduction
Establishing a charitable remainder trust – Provides a steady income stream to the named beneficiaries first with the remainder going to the charitable organization
Charitable giving provides multiple benefits to both the organizations that receive the contributions and the donors who make them. By including charitable giving as a component of your estate and tax planning, you can support the causes and organizations that you believe in while also helping to reduce your taxable income, avoid capital gains taxes, and reduce any estate tax liability your family might have after you pass away.