Philanthropy

Making the Most of Your Charitable Giving Before OBBBA Changes Take Effect

Charitable Giving, Philanthropy, Tax Planning / /

Americans have always shown incredible generosity. In fact, charitable giving reached an astounding $592.50 billion in 2024, according to Giving USA. If giving is already woven into your financial life, now is a great time to revisit your approach. Starting January 1, 2026, the One Big Beautiful Bill Act (OBBBA) will introduce permanent changes to how charitable gifts are treated for tax purposes, with the biggest effects felt by those who itemize deductions.

What’s Ahead in 2026: Updates to Charitable Deduction Rules

Beginning in 2026, the One Big Beautiful Bill Act (OBBBA) introduces permanent revisions to how charitable contributions are treated for tax purposes. Below is an overview of the key changes you’ll want to keep in mind:

Above-the-Line Deductions for Standard Deduction Filers

Starting in 2026, taxpayers who don’t itemize will still be able to claim a charitable deduction. The allowance is:

  • Up to $2,000 for couples filing jointly
  • Up to $1,000 for individuals

This deduction applies only to cash donations made directly to eligible public charities. It does not extend to gifts contributed through donor-advised funds (DAFs) or to non-cash contributions.

Reduced Charitable Deduction for Itemizers

Starting in 2026, those who itemize deductions will see a small but permanent reduction in the charitable deduction they can claim. The new rule trims 0.5% of adjusted gross income (AGI) from the total amount deductible, lowering the tax benefit of giving.

For instance, with an AGI of $400,000, the 0.5% reduction equals $2,000. Therefore, if you contribute $20,000 to charity, only $18,000 would count as a deductible expense under the updated rules.

Deduction Limits for High-Income Taxpayers

Beginning in 2026, individuals in the highest tax bracket will see a reduced benefit from charitable giving. The maximum value of deductions will be capped at 35%, compared to the current 37%. This change comes in addition to the new rule that trims 0.5% of adjusted gross income (AGI) from the amount eligible for deduction.

For example, if your AGI is $1 million in 2026 and you donate $50,000:

  • The 0.5% AGI reduction removes $5,000, leaving $45,000 as the deductible portion.
  • Applying the 35% limit, your tax savings would be $15,750.

Under today’s rules, the full $50,000 would qualify at 37%, resulting in $18,500 of tax savings. That’s a difference of $2,750, illustrating why it may be wise to plan charitable contributions before these new rules take effect.

What Stays the Same

Qualified charitable distributions (QCDs) from IRAs will remain one of the most tax-efficient ways for retirees to give. These gifts are still fully deductible, excluded from adjusted gross income (AGI), and untouched by the upcoming law changes.

5 Charitable Giving Moves to Consider Before 2026

While the OBBBA will soon bring lasting changes to charitable giving tax rules, there’s still time to take advantage of the current, more favorable framework. Here are a few strategies to consider putting in place before year-end:

#1: Accelerate Giving into 2025

If you anticipate making large charitable gifts in the coming years, it may be wise to move some of that giving into 2025. Doing so allows you to lock in today’s more favorable deduction rules before they change.

This approach can be particularly advantageous if:

  • You plan to itemize deductions in 2025.
  • Your income or deductions are likely to be lower in future years.
  • You’re in the top tax bracket and want to benefit from the current 37% deduction rate.

#2: Bunch Contributions to Boost Tax Efficiency

If you typically spread out your charitable gifts, consider grouping several years’ worth into 2025. By “bunching” donations, you may push your total contributions above the standard deduction limit, making itemizing worthwhile and increasing your overall tax savings.

For instance, rather than donating $10,000 in both 2025 and 2026, you could give $20,000 in 2025, itemize that year, and then take the standard deduction the following year. This way, you maximize deductions without altering the total amount you give.

Using a donor-advised fund can make this strategy even more effective. You claim the full deduction in 2025 while retaining flexibility to distribute funds to charities over time.

#3: Give Non-Cash Assets Before the Rules Change

Under the OBBBA and its new charitable giving rules, non-itemizers won’t be able to claim an above-the-line deduction for non-cash contributions such as clothing, household goods, or appreciated securities. In other words, unless you itemize, these gifts won’t provide a tax benefit.

If you currently itemize but expect to take the standard deduction in future years, consider making your non-cash donations in 2025 so you can still deduct their value under the existing rules.

Examples of non-cash contributions to consider this year include:

  • Gently used clothing and household items
  • Vehicles
  • Appreciated stocks or other securities
  • Collectibles or other tangible property

Remember to keep proper records of your donations, particularly for items worth more than $500.

#4: Take Advantage of QCDs at Age 70½+

For retirees, qualified charitable distributions (QCDs) remain one of the most tax-efficient ways to give. If you’re 70½ or older, you can transfer up to $108,000 in 2025 (inflation-adjusted) directly from your traditional IRA to a qualified charity, and the amount counts toward your required minimum distribution (RMD).

QCDs offer several advantages:

  • They don’t increase your AGI, which may help you avoid higher Medicare premiums and other income-related taxes.
  • They are unaffected by the OBBBA, meaning the tax benefits stay intact beyond 2025.
  • You can donate to multiple charities in one year while keeping your tax reporting simple.

Important: the transfer must go straight from your IRA custodian to the charity. If you withdraw the funds first, the amount will be treated as taxable income and won’t qualify as a QCD.

#5: Consider a Donor-Advised Fund (DAF)

A donor-advised fund lets you make a large, deductible gift now while giving you the flexibility to distribute the money to charities gradually. This can be an effective way to bunch donations or lock in today’s more favorable deduction rules while still supporting causes over time.

With a DAF, you can:

  • Claim the deduction in the year you contribute.
  • Decide later when and how to recommend grants to charities.
  • Contribute appreciated assets, such as stock, to avoid capital gains taxes while still receiving the full deduction (if you itemize).

One key note: starting in 2026, DAF contributions won’t qualify for the new above-the-line deduction available to non-itemizers. If you expect to use the standard deduction in future years, opening or funding a DAF before the rules change can help maximize your tax benefits.

Maximizing Your Charitable Giving Ahead of OBBBA Changes

With the OBBBA changes on the horizon, this is a good moment to be more intentional with your charitable giving. If generosity is part of the future you’re building, taking action before year-end can help you make an even bigger difference while taking advantage of today’s more favorable tax rules.

Explore our free resources for helpful tips, tools, and educational content to support your financial journey.

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Empowering Change: What You Can Do Post-Election

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Election

The aftermath of a contentious election can feel overwhelming, especially when the results challenge the values and causes you hold dear. It’s natural to experience disappointment, frustration, or even grief in moments like these. However, the strength of democracy lies in its resilience—its ability to evolve and adapt through sustained participation, not just the results of a single election.

This moment can serve as a catalyst for meaningful action. Many of my clients have found ways to channel their frustration into purposeful work—whether by advocating for causes they care about, increasing donations to impactful organizations, or simply becoming more engaged in their communities. These actions often lead to a renewed sense of empowerment and the opportunity to make a tangible difference.

History reminds us that transformative social movements often begin with small groups of committed individuals united by a vision for a better future. Whether you’re new to activism or a seasoned advocate, here are some constructive ways to redirect your energy toward building a brighter tomorrow.

#1: Make a Positive Impact in Your Community Post-Election

National politics can sometimes feel abstract or out of reach, but local government directly impacts our daily lives. Decisions about education, zoning, housing, and community development often happen at the municipal level, where your voice can carry significant weight.

If you’re ready to take an active role, consider running for a local position such as school board or city council. These roles allow you to influence policies that shape your community. Not quite ready for that step? Start by joining municipal committees, attending public meetings, or volunteering with local organizations. Your consistent participation and thoughtful input can drive meaningful change.

Grassroots organizing is another powerful way to make a difference. Connect with movements aligned with your values or launch your own initiative to address specific local issues. Effective community work often begins with small, tangible projects. For instance, organizing a neighborhood clean-up, launching a community garden, or hosting forums to discuss local challenges can lead to visible improvements while fostering trust and collaboration.

These small actions build the foundation for broader progress. When people with diverse perspectives unite around shared goals—such as improving public safety, revitalizing neighborhoods, or enhancing schools—their collective efforts create lasting change.

#2: Get Involved in State and Local Politics

While presidential elections dominate headlines, state and local elections often have a greater immediate impact on critical policies like education, voting rights, and healthcare access. These elections are frequently decided by narrow margins, meaning your engagement can make a significant difference.

Now is the time to prepare for the 2026 midterms and other local races. Research candidates, study district demographics, and identify ways to boost voter turnout in your area. Deepening your involvement with your local political party or advocacy group can amplify your efforts. Attend meetings, join committees, or even take on a leadership role like precinct captain.

Precinct captains are vital connectors between political parties and their communities. They organize voter outreach, coordinate get-out-the-vote efforts, and mobilize neighbors around shared goals. If you prefer behind-the-scenes work, activities like phone banking, managing voter databases, or helping with campaign logistics are equally impactful.

Sustained engagement is key. The work you do today builds momentum for tomorrow, helping to create a foundation for meaningful victories in the future.

#3: Champion Causes That Matter to You Post-Election

Making a difference in the world often starts with small, intentional steps. If you’re passionate about environmental protection, social justice, or another cause, there are numerous ways to contribute your time, skills, or resources.

For example, if climate change resonates with you, connect with local conservation groups or environmental organizations. In the Bay Area, groups like the Golden Gate Bird Alliance or Urban Sprouts offer opportunities to volunteer for habitat conservation, community gardening, or food justice initiatives.

For those with specialized skills, like legal expertise, consider offering your services to social justice organizations. The East Bay Community Law Center, for example, supports low-income residents with legal aid, offering a meaningful way to directly impact lives.

Educational workshops are another avenue for change. Hosting forums on topics like voting rights or environmental justice can raise awareness, spark important conversations, and inspire collective action.

#4: Invest in Future Generations

One of the most powerful ways to create lasting change is by empowering the next generation. Establishing or contributing to college savings accounts can help children in your family—or underserved communities—gain access to higher education.

Volunteering as a mentor is another impactful way to share your knowledge and inspire young people. Many students are eager to learn about civic engagement, environmental advocacy, or social justice. By guiding them, you can spark their passion and help shape future leaders. If you’re an employer, consider offering internships to provide hands-on experience and open doors to fields they might not otherwise access.

Supporting civic education can also make a lasting impact. Partner with schools to enhance programs that teach democratic processes or help students register to vote. Mentoring student government organizations fosters informed, engaged citizens who are empowered to advocate for change.

Building a Better Future, One Action at a Time

While the outcome of an election may feel disheartening, it’s important to remember that democracy is a long-term effort. Progress often happens incrementally, through sustained participation and collective action. Each step you take—no matter how small—creates ripples that strengthen the fabric of our society.

Your commitment to meaningful action is what drives lasting change. Stay engaged, remain hopeful, and focus on what you can do today to help shape a brighter future. Together, we can build a more resilient and inclusive democracy.

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Charitable Giving, Part 4: Tax-Smart Ways to Give to Charity (Part 2)

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Tax Efficient Giving Strategies

In my last article, I shared a few charitable giving strategies that can help you be your generous self while at the same time being tax smart. In part four of this four-part series, I continue that theme and offer some final thoughts on tax-efficient giving.

Qualified Charitable Distributions

A Qualified Charitable Distributions (QCD) allows IRA owners above age 70 ½ to transfer up to $100,000 directly to charity each year. One of the benefits of donating via a QCD is that you can give to your favorite charity while potentially reducing your taxable income.

In addition, a QCD can satisfy all or part of your required minimum distribution (RMD) once you reach RMD age. This benefit makes it an especially tax-efficient giving strategy for people who have other income sources and don’t necessarily need their RMD.  

Keep in mind that you must satisfy a few key rules for a QCD to be a non-taxable distribution.

Most importantly, the IRS considers the first dollars out of an IRA to be your RMD until you meet your annual requirement. To get the full tax benefit of a QCD, be sure to donate the funds directly from your IRA to charity before making any other withdrawals from your account.

In addition, your IRA custodian will require you to complete and sign a form that details your QCD intention. Then, the custodian will send a check to the charity of your choice.

In some cases, your custodian may allow you to write checks against your IRA. Just be aware that your checks must clear before year-end, so it pays to plan ahead.

Charitable Gift Annuities

A Charitable Gift Annuity is a tax-efficient giving strategy where an individual makes an irrevocable transfer of money or property to a charity. In return, the charity pays the individual a fixed income for the rest of their life or a specific term. The fixed payment amount is based on several factors, including the donor’s age, the donation amount, and current interest rates.

In addition, the donor receives a tax deduction for the initial donation and potential tax-free income from the annuity payments. When the donor dies, the charity retains the remaining assets for its mission.

Here are some things to keep in mind when donating to a Charitable Gift Annuity:

  • The gift is irrevocable.
  • Annuity payments are fixed and don’t adjust for inflation.
  • The annuity payments may be lower than a comparable annuity that is not charitable.

Charitable Remainder Trusts (CRTs)

A Charitable Remainder Trust (CRT) is a “split interest” giving vehicle that allow donors to contribute assets to a trust and receive a partial tax deduction. The trust’s assets are then divided between a non-charitable beneficiary (who receives a potential income stream for a term of years or life) and one or more charitable beneficiaries (who receive the remainder of the assets).

There are two types of CRTs: Charitable Remainder Annuity Trusts (CRATs) and Charitable Remainder Unitrusts (CRUTs). Each has its own distribution method.

CRTs have several benefits, including the preservation of highly appreciated assets, income tax deductions, and tax exemption on the trust’s investment income. In addition, you can donate a variety of assets to a CRT, including cash, securities, closely held stock, real estate, and other complex assets.

CRTs can also be established by will to provide for heirs with the remainder going to charities of the donor’s choosing.

Final Thoughts on Tax-Efficient Giving Strategies

Qualified Charitable Distributions, Charitable Gift Annuities, and Charitable Remainder Trusts are all potentially tax-efficient giving strategies that can help you achieve your philanthropic goals. Yet they are also complex and may not be right for everyone.

If you’re considering one of these strategies or are looking for more tax-smart giving ideas, be sure to consult an attorney, tax expert, and/or financial planner to determine which strategies make sense for you. In the meantime, please visit our Resources page for more information on this and other financial planning topics.

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Charitable Giving, Part 3: Tax-Smart Ways to Give to Charity (Part 1)

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Tax-Smart Ways to Give to Charity

If you’ve read the first two articles in this blog series, perhaps you’ve put some thought into how much you want to give to charity each year and to whom. In the second half of this series, we’ll discuss tax-smart ways to give to charity. Tax laws can be dense, so bear with me as I explain the strategies as clearly as possible!

The first thing to know about charitable giving and taxes is that you must itemize on Schedule A of Form 1040 to deduct your charitable donations for the year.

Your total itemized deductions must exceed the standard deduction for you to reap the tax benefit of giving to charity. In 2024, the standard deduction is $14,600 for single filers and married couples filing separately, $29,200 for joint filers, and $21,900 for heads of household.

Fortunately, if you typically take the standard deduction and the amount you give to charity each year doesn’t push you over the threshold to itemize, there are strategies you can employ to maximize your tax savings.

To maximize your tax savings, consider the following tax-smart ways to give to charity:

#1: Bunching

Suppose you’re a non-itemizer but get close to the standard deduction because you max out the State and Local Tax (SALT) deduction at $10,000. Then, you may want to consider a strategy referred to as “bunching.”

How Bunching Works

Bunching is a tax-smart way to give to charity where taxpayers combine or “bunch” their charitable donations into one tax year so they can itemize their deductions.  

Suppose a single taxpayer usually gives $3,000 to charity annually. Meanwhile, their other qualifying itemized deductions (such as state and local taxes, mortgage interest, and medical expenses) amount to $10,000 for a total of $13,000 in deductions.

Thus, it would make sense for this taxpayer to take the standard deduction of $13,850 and not itemize. But let’s say instead they give two years of their charitable budget, or $6,000, in one year.

In this case, they would itemize since their total deductions ($16,000) exceed the standard deduction. If this person is in the 24% tax bracket, their tax savings from charitable donations would be $516 for the year.

This strategy or something similar can be repeated over time, creating multi-year tax savings.

#2: Donor-Advised Funds as a Tax-Smart Way to Give to Charity

In the above example, we assumed the taxpayer wrote a total of $6,000 in checks and mailed them to their preferred charities in one year. Then, they skipped donating to charity in year two.

But there are other tax-smart ways to give to charity that can be even more financially advantageous than bunching and allow for giving each year. One example is to utilize a donor-advised fund (DAF).  

How DAFs Work

A DAF is a registered 501(c)(3) organization that can accept cash donations, appreciated securities, and other non-cash assets. Thus, if you hold highly appreciated securities in a taxable investment account, you may benefit greatly from donating to a DAF.

Here’s why. Suppose instead of writing checks for $6,000 to various charities, the same taxpayer in the example above transfers $12,000 worth of Apple (AAPL) stock with a cost basis of $35/share into a DAF. The stock is worth $160/share on the day of the donation.

The taxpayer can take a tax deduction of $12,000 (the current market value of the shares they donate) on that year’s tax return. They also avoid paying the capital gains taxes they would have incurred by selling the stock outright. This amounts to a savings of over $1,400 ($9,375 gain x 15% long-term capital gains tax rate).

Once they donate their shares to a DAF, the fund sponsor can sell the shares tax-free. The taxpayer can then invest the proceeds within the DAF and let the funds grow tax-free over time. In addition, they can designate which charities they want to receive grants from the DAF going forward.

Like bunching, donating to a DAF allows you to take a potentially large tax deduction in the year you make the donation. Yet unlike bunching, you don’t have to decide which charities to donate to right away. Instead, you can donate your $3,000 as planned each year from funds in your DAF.

Key Advantages of DAFs

  • Flexibility: Donors can recommend distributions to multiple charities over time without having to manage individual grants to each organization.
  • Tax benefits: Donors can claim an immediate tax deduction for the full amount of their donation, subject to certain limitations.
  • Investment management: DAFs typically offer a range of investment options and professional management services to help grow the value of the donations.
  • Privacy: Donors can choose to remain anonymous when making recommendations for grants, if desired.
  • Legacy: DAFs can provide a way for donors to involve their family in philanthropy and pass down charitable values and traditions to future generations.

Limitations of DAFs

Keep in mind that DAFs are not free. According to a 2021 study by National Philanthropic Trust, the average total fee for DAFs was 0.96% of assets per year. This fee includes administrative fees, investment management fees, and any other fees the DAF provider charges.

In addition, DAFs come with a number of rules, including minimum balance requirements, minimum grant requirements, deadlines, and grant approvals.

Many DAF providers require a minimum initial contribution ranging from $1,000 to as much as $25,000. Once you establish the fund, there’s typically a minimum balance requirement between $5,000 and $25,000. If you fail to meet these minimums, the provider may change additional fees or penalties.

In addition, some DAF providers may have minimum grant requirements ranging from $50 to $250 or more. And because most people actively grant at the end of the year, there may be deadlines for making grants to ensure timely processing.

Lastly, DAF providers must approve grants before disbursement to ensure the recipient is an eligible charitable organization and that the grant doesn’t violate IRS rules or regulations. However, disapproval of a grant is rare.

Despite these limitations, the potential benefits make DAFs a tax-smart way to give to charity worth considering in many cases.

tax-smart ways to give to charity

Popular DAF Providers

While there are many donor-advised funds (DAFs) in the United States, the most popular providers tend to be large financial institutions and nonprofit organizations. Examples include:

  1. Fidelity Charitable: Fidelity Charitable is the largest DAF provider in the US, with over $35 billion in assets and more than 200,000 donor-advised funds.
  2. Schwab Charitable: Schwab Charitable is the second-largest DAF provider in the US, with over $20 billion in assets and more than 180,000 donor-advised funds.
  3. Vanguard Charitable: Vanguard Charitable is a DAF provider affiliated with the investment firm Vanguard, with over $14 billion in assets and more than 80,000 donor-advised funds.
  4. National Philanthropic Trust: National Philanthropic Trust is a nonprofit organization that offers DAFs and other philanthropic services, with over $8 billion in assets and more than 18,000 donor-advised funds.
  5. Silicon Valley Community Foundation: Silicon Valley Community Foundation is a community foundation that offers DAFs and other charitable services to donors in the Silicon Valley region and beyond, with over $13 billion in assets and more than 4,000 donor-advised funds.
  6. DonorsTrust: DonorsTrust is a nonprofit organization that offers DAFs and other philanthropic services to donors who prioritize limited government, personal responsibility, and free enterprise.

It’s worth noting that there are many other DAF providers in the US, and your choice of provider will depend on your specific philanthropic goals and financial situation. You must do your due diligence to understand the fees, rules, and requirements if you’re considering this tax-smart way to give to charity.

Next: Tax-Smart Ways to Give to Charity Part 2

Hopefully you now have a better understanding of why bunching and DAFs can be tax-smart ways to give to charity. In the final article of this blog series, I’ll share a few more giving strategies that can help you maximize your impact and tax savings.

In the meantime, please visit our Resources page for more information on this topic and beyond.

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Charitable Giving, Part 2: Which Charitable Organizations Should You Donate To?

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Which Charitable Organizations to Donate To

This article is part two in a four-part blog series focused on charitable giving and will address the question: Which charitable organizations should you donate to?

Once you’ve decided how much money to give to charity each year, you can focus on the recipients. According to Giving USA Foundation, the types of charities that tend to receive the most donations are:

  • Religious organizations
  • Educational institutions
  • Human services such as food banks, disaster relief organizations, and homeless shelters
  • Health-related charities such as hospitals and medical research centers
  • Arts and culture charities such as museums, orchestras, or theatre groups

Many people tend to respond to end-of-year donation solicitations they receive by email or mail and give to the same organizations every year. But if you want to be more proactive about your giving, spend some time thinking about the issues or causes you care about and find the organizations that impact those issues or causes most.

Smaller organizations may have a greater need for your dollars than larger organizations. As such, you may want to take advantage of opportunities to give to local organizations, such as theatre or educational groups.

For example, I donate to a local organization called Foodwise, whose mission is “to grow thriving communities through the power and joy of local food.” Not only do I admire their mission, but I was also previously a board member and get a lot of pleasure from attending their events.

Another example is a client of mine who donates to a swim club she belongs to that’s organized as a 501(c)(3) organization. The swim club was renovating its clubhouse, so she donated dollars specifically to help get this project completed. Another client gives to a hiking club because she’s an avid hiker. 

A Word About 501(c)(3) Organizations When Deciding Which Charitable Organizations to Donate To

Suppose you’re eligible for tax deductions for charitable giving. (Ordinally, you must itemize deductions on Schedule A of your Federal Tax return to receive a tax benefit.) In that case, you should ensure that the organization you donate to is a 501(c)(3) organization.

A 501(c)(3) organization is a tax-exempt nonprofit in the U.S. that must operate exclusively for religious, charitable, scientific, literary, or educational purposes. It addition, the organization must not engage in political or lobbying activities or provide private benefits to any individual or group.

It’s also important to note that if you contribute money through crowdfunding platforms such as GoFundMe, Kickstarter, or Indiegogo, these donations are typically not tax deductible. That’s because the individual fundraising campaigns aren’t tax-exempt organizations. 

Investigating the Charitable Organizations You Donate To

There are several ways to investigate charities to ensure they’re using your charitable donations properly.

One well known charity evaluation organization is Charity Navigator, which provides ratings and financial information on thousands of nonprofits and assigns a rating based on their performance.

Another is GuideStar, which allows you to search for nonprofits by location, mission, or types of work. 

How Many Organizations Should You Donate To?

Lastly, many clients ask me if it’s better to give a large amount of money to one organization or spread their donations among several organizations. I’ve found that this is a personal decision.

Some people care about so many things that they want to spread their money widely. Meanwhile, others prefer to have a more significant impact on just a couple of organizations.

One thing I know for sure: try and give at times other than just the end of the year. The charities will appreciate it, plus you won’t get that anxious feeling that you haven’t done enough on December 31. In addition, if you write checks or take advantage of Qualified Charitable Distributions (QCDs), you’re more likely to meet the deadline to get a tax deduction in the year you donate.

Next: Giving Strategically

The first half of this blog series has focused on how much to give and which organizations to donate to. In part three, we’re going to explore various ways to give strategically, so you can make more of an impact with your donations while enjoying the associated tax benefits.

In the meantime, please visit our resources page for additional details on this topic, and stay tuned for more.

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A Great Alternative to Grocery Stores: Farmer’s Markets

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My anxiety level spikes at the thought of going to a grocery store. The lines are long, and once inside, it’s like playing bumper carts with your fellow shoppers all scrambling to keep out of each other’s way. I’m so grateful to the workers who are cashiering and bagging groceries, but I worry about them at the same time.

Photo Courtesy of CUESA

A great alternative and one I highly recommend is shopping at your local farmer’s market.

You will be outside in fresh air;
You will buy produce harvested the day before;
You will find sustainably raised meat, fish, and eggs and fresh cheese;
You will most likely find freshly baked bread and good coffee;
You will be buying from small farmers and other independent food businesses who need your support.

I guarantee you’ll feel energized and happy after spending an hour or two in a farmer’s market community.

PRECAUTIONS TO KEEP YOU SAFE

Photo Courtesy of CUESA

Farmers and other vendors are taking precautions to keep you safe by offering bagged fruits and vegetables, selecting items for you, maintaining lines, and encouraging the use of apps, or credit cards instead of cash. Some are offering curbside pickup of pre-packed boxes. The farmers market at the Ferry Plaza farmers market in San Francisco run by CUESA – The Center for Urban Education For Sustainable Agriculture, has curated a “best of the market” box that you can purchase on-line and then drive-by to pick up. I bought it last Saturday, and I’ve been enjoying the bounty all week.

If you live in the San Francisco Bay Area and would like to be notified about the CUESA Farmers Market Box availability sign up here. You can also order from the individual farms that sell at the market here.

If you don’t live nearby, here is an excellent directory of farmer’s markets nationwide. And lastly, if you aren’t convinced yet, the CUESA staff wrote an excellent article about why farmer’s markets are essential for our health and well being.

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A Little Year End Tax Planning with Your Holiday Punch

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HD-200911-r-pomegranate-punchOr,  8 Year End Tax-Related Deadlines and Things to Think About

With the busyness of the holiday season, it’s easy to forget about things like tax planning. After all, we’d rather focus on having fun with our friends and family! However, there isn’t much you can do to improve your tax situation after December 31st for 2015, so now is the time to do a little planning so as not to miss out on tax-saving or retirement saving opportunities and avoid penalties. (After all, the IRS has ways of knowing who has been naughty!).

1. Roth IRA Conversions: There were income limitations on converting regular IRA’s to Roth IRA’s, but no longer, now anyone can convert IRA’s to Roth’s as long as they are able and willing to pay the tax on the conversion. Why would you want to do this? Because converting to a Roth IRA will guarantee you will owe no income tax on the funds if withdrawn during retirement because you pay the tax now. For example, if your income dropped in 2015 due to a job change, you might consider converting some of your IRA to a Roth because you will be in a lower tax bracket and pay less taxes than you might in future years. The deadline for conversions is December 31, 2015, but you will want to do this by at least December 22nd to make sure the paperwork gets processed with your custodian.

2. Establishing a New Qualified Retirement Plan:  If you are self-employed and want to establish a qualified plan such as a 401(k), money purchase, profit-sharing or defined benefit plan, it must be set up by December 31st. Many people confuse this deadline with the SEP IRA deadline that can go into the next year, including extensions.

3. Max Out Qualified Plan contributions. If you contribute to a 401(k) or 403(b) at work and have not contributed the maximum and are able to, talk to your payroll department to increase your contribution before December 31st. For those under 50, the maximum contribution is $18,000 and for those over 50, the maximum contribution is $24,000. At the very least, try to contribute up to any employer match.

4. Take RMD’s (Required Minimum Distributions) on retirement accounts if you have reached age 70 ½. The minimum distribution rules apply to traditional IRA’s, SEP IRAs, SIMPLE IRAs, 401(k) plans, 403(b) plans, 457(b) plans, profit sharing plans and other defined contribution plans. If you don’t take the distributions or don’t take enough out, you may have to pay a 50% excise tax on the amount not distributed as required.

5. Take MRD’s From Inherited IRAs. If you have inherited an IRA from someone other than a spouse, you must take minimum required distributions beginning in the year after the year of death of the original owner and by December 31st of that year. To calculate the MRD, the IRS has a Single Life Expectancy table and each year you would subtract one year from the initial life expectancy factor. Fortunately, there are on-line calculators to help you do this!

6. Review Your Charitable Contributions. If you itemize deductions and are charitably minded, you will want to donate what you plan to before December 31st . You may deduct an amount up to 50% of your adjusted gross income, but 20% and 30% limitations apply in some cases. Good to know: donations made by check are considered delivered on the day you mailed it.

7. Donate Highly Appreciated Assets To Charity. Any long-term appreciated securities, such as stocks, bonds or mutual funds may be donated to a public charity and a tax deduction taken for the full fair market value of the securities up to 30% of the donor’s adjusted gross income. In addition to the tax deduction, the donor avoids any capital gains taxes. Probably the easiest way to do this is to set up a donor-advised fund –it’s like a charitable savings account: a donor contributes to the fund as frequently as they like and then recommends grants to their favorite charity when they’re ready.

8. Do Some Tax-Loss Harvesting. This is the practice of selling a security that has experienced a loss. By selling the security and taking the loss, an investor can offset taxes on capital gains or up to $3000 on ordinary income. The sold security can be replaced by a similar one, maintaining the optimal asset allocation and expected returns. When doing this, watch out for the wash-sale rule: your loss is disallowed if, within the period beginning 30 days before the date of the loss sale and ending 30 days after that date, you acquire a substantially identical security.

And, don’t forget to take a sip of that punch!

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Short List for your Finances 2014

Charitable Giving, Financial Planning, Inheritance, Philanthropy, Retirement Planning, Tax Planning / /

listThere are many actions you can take to improve your finances, and that’s sometimes the problem. I have compiled a short list of ideas that can make a real difference in your financial health. Copy and paste this short list into Evernote or other list-making software or  print it out and tape it to your fridge. Then check off the items as you complete them and celebrate with your favorite indulgence – mine would be a piece of high-quality chocolate or a glass of Pinot Noir!

1. Write Down Your Financial Goals. We all know that writing things down makes them more real. Just having ideas floating  around in our heads  doesn’t cut it. Quantified goals are more likely to be achieved, so be as specific as possible as to deadlines and numbers.  For example, “I want to increase my net income by 20% in 2014 through a combination of decreasing expenses and adding new clients,”or “I want to reduce my spending on dining out from $500 to $300 per month.”  Next, you can make a plan to tackle your specific goals.

2. Make a Plan to Tackle Your Goals. Big goals can seem less daunting if you break them down into action steps. Take your list of goals and write down a simple plan of action for each. For example, taking the first goal above, an action item could be to review all business expenses from 2013 and determine whether they are 1. necessary 2. you could find a cheaper alternative, or 3. you could get away with spending less. Make a commitment to tackle the action steps by scheduling them into your calendar. 

3. Review Your Retirement Saving Strategy.  Most of us are saving on a regular basis to a retirement plan through our employer or through a self-employed retirement plan, but not all of us are saving as much as we could. Review your current payroll deductions into your 401(k) or your IRA contributions and see if you can increase the contribution amount to this year’s limits. Time is as important as the amount of money you save – it pays to start earlier than later.

If you are contributing to a Roth IRA, congratulations! – you have taken advantage of an excellent retirement savings vehicle. If you follow all the rules, you will only pay tax on the money invested once – before you contribute to the Roth. After that, your contribution and earnings can grow tax free for years.

4. Call your Insurance Agent. If you have been paying your insurance premiums for auto, home, and liability coverage on automatic, take the time to call your insurance agent or shop your insurance to feel confident you’re getting the best deal and your coverage is adequate for your current life situation. You might be surprised to find out that you have been overpaying or are underinsured.

5. Make a Charitable Giving Plan. Giving to needy or inspiring causes is a wonderful thing – the act of giving uplifts us and benefits the recipient. It  can also have excellent tax advantages, so it pays to know the different ways to give. For example, a great way to donate to a charity is to use a Donor Advised Fund (DAF). DAF’s can be funded using appreciated securities rather than cash, the securities are then sold within the fund to avoid the capital gains tax. The tax deduction is taken in the year when the account is funded avoiding ongoing record-keeping.

6. Understand Your Parent’s Finances. As uncomfortable as it may seem, it’s really important to talk to your parents about their financial planning so you know where they stand financially now and when they die. Questions to get answers to:  Do they have a plan to pay for possible long term care expenses? Have they created wills and trusts so that their estate is distributed with the least amount of costs and hassle? Do they have Durable Powers of Attorney set up for healthcare and finances? Knowing the answers to these questions before your parents grow too old will reduce stress later and possibly save dollars.

I’ll stop now and give you a chance to get started on your short list! If you enjoyed this post and found it useful, please let me know by commenting, tweeting it, or posting it on LinkedIn, Facebook, or Pinterest and I will plan to write similar posts in the future.

 

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