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Celebrating the Legacy of Martin Luther King Jr.

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Marting Luther King Jr. and American Flag

Martin Luther King Jr. Day is tomorrow (January 20) I think it’s important to pay tribute to a man who truly championed ideals of equity, freedom, peace, and justice. Among his many accomplishments, Dr. King tirelessly pushed for nonviolent activism and peaceful resolution to human rights issues. He reportedly wrote five books and gave hundreds of speeches in a single year…more than most of us could produce in a lifetime. And, there’s no doubt that he was a key player and influencer in the passage of the U.S. Civil Rights Act of 1964. Dr. King was subsequently was awarded one of the highest honors in the world in 1964—the Nobel Peace Prize—for “his dynamic leadership of the Civil Rights movement and steadfast commitment to achieving racial justice through nonviolent action.” (He donated the prize money, $54,123, back to the civil rights movement.)

Dr. King and his lasting legacy can undoubtedly serve as an inspiration to us all. I see his dream of a better world—a better future for all—exemplified in action by the hardworking Iowa-based nonprofit organizations. I also see his lessons being practiced by the wonderful donors who support these organizations and advance their missions.

So, yes, it’s nice to have a day off of work, but make certain the day doesn’t pass you by without setting a plan in place to perform some form of service for others.

Dr. King tirelessly pursued the advancement of human rights for the greater good and we can honor him by practicing forms of charitable giving as a way to advance our communities. Be it through volunteering time to an organization that speaks to your heart (remember, certain costs associated with volunteer can be tax deductible), setting up a donor-advised fund, or simply writing a list of the nonprofits you would like to include as beneficiaries in your will, you too can set out on an honorable service-oriented path and inspire your friends, family, and colleagues to follow suit.

MLK Jr. Day Quote

Dr. King’s lessons resonate with our hearts and heads because we too have dreams of making our corners of the world a better place to learn, live, and grow through service. Maybe Dr. King’s commitment to “practice what you preach” mentality has inspired you this year to give charitably more and more often. Maybe you considered his question, “What’s your life’s blueprint?” and decided to form the charity you’ve wanted to establish for a long time. Either way, don’t hesitate to contact me for a free consultation. As Dr. King said: “The time is always right to do what is right.”

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25 Days of Giving: Donation Bunching

glittery ornaments

Passed in 2017, the Tax Cuts and Jobs Act ushered in many changes, including an increase in the standard deduction. The deduction for single filers is now $12,200 and $24,400 if you are a married joint-filer. In reality, this means that the number of households claiming the itemized deduction (including their exempt charitable donations) is much less compared with previous tax schemes. But, fear not. There are strategies to clear the initial standard deduction threshold.

What the Heck is Bunching?

One of the major options available to charitable donors is to “bunch” donations. To bunch donations you make larger charitable donations this year in a way that exceeds the standard deduction and then smaller ones next year to compensate. Depending on your charitable giving capacity and goals, this means you could alternate every other year or every few years.

Reminder, substantiated donations to a qualified nonprofit can be combined with mortgage interest and state/property taxes when calculating excess above the standard deduction limit. (The Greater Kansas City Community Foundation created a useful illustrated chart of this concept.

man in chair at christmas

Bunching in Practice

By way of example, instead of giving you “normal” $5,000 to charity annually, consider accelerating your gift two years worth of donations in 1 year. So you would end up giving $10,000 every two years. The $10,000 is the same amount you planned to give over the two years but strategically donated in a way that maximizes itemized tax benefits. With this option, you may claim your itemized deductions over the limit one year and then take the standard deduction the next.

25 Days of Giving: Help a Charity With Your Retirement Assets

Donor-Advised Fund

If you’re considering bunching donations, you may want to do so through a donor-advised fund (or DAF), which offers a unique level of donative flexibility. The DAF allows you to make charitable contributions and receive an immediate tax break for the full donation, even though you can choose to recommend grants to your fave nonprofits from the fund at a later date and over time.

Questions about bunching or how to maximize your charitable donations under current federal and state tax laws? Don’t hesitate to contact me for a free one-hour consultation!

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Free Guide for Professional Advisors: Smart Charitable Giving Solutions

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I love getting to collaborate with wonderful professional advisors (like financial advisors and insurance agents, among many others) to promote and maximize charitable giving in Iowa. Together we get to help their clients best incorporate strategic charitable giving in to their financial and estate planning goals and plans.

Charitable Giving: As American as Apple Pie

People come to philanthropy from many different places and for many different reasons. Beyond the obvious tax benefits of donating to a charitable organization, there’s always that admirable intention of wanting to make a difference, of aspiring to help the organizations and causes they care about progress.

As a starting point for discussing smart charitable giving solutions, I’ve created this handy one-pager. It gives an overview of strategies like the popular donor advised fund and different types of charitable trusts, and reminds of other options like an IRA charitable rollover and retained life estate. The pdf also hits on aspects of the Tax Cuts and Jobs Act that prospective donors and professional advisors should be aware of.

Smart charitable giving guide

Click here to view the free guide to smart charitable giving solutions and then let’s continue the conversation. Additionally, you can learn more about how Gordon Fischer Law Firm works with the professional advisors here. Together I’m certain we can craft the best, legal giving solutions that align with your clients’ giving goals.

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