Fidelity Charitable Offers 4 Strategies for Giving in Fluid Tax Environment

Most tax rules for 2012 still hold, while 2013 is rife with uncertainty

The year-end fiscal cliff-hanger is confronting donors and their financial advisors with the possibility of higher tax rates and limitations on itemized deductions just as they are considering charitable giving plans.

Last week, Fidelity Charitable rolled out an online Giving & Taxes Center to help philanthropists find the best approaches to funding giving plans now and in the future.

The new tool offers four strategies to make the most of the 2012 tax environment and prepare for potential changes in 2013:

  1. Increase cash donations before deductions potentially lose value.
  2. Donate long-term appreciated securities to reduce taxes now and later.
  3. Accelerate income where possible to take advantage of current tax rates.
  4. Build flexibility into charitable trusts to prepare for a potential increase in estate taxes.

Absent congressional action before the end of this year, the 2001 and 2003 tax cuts will expire, Fidelity noted in a statement. In addition, President Barack Obama has proposed tax changes that would affect the tax advantages donors currently see for their charitable gifts.

“Donors care deeply about the causes they support, and understanding the tax environment can help them give even more to charity,” Sarah Libbey, Fidelity Charitable’s president, said in the statement.

“The tax rules could change in 2013, but the majority of the rules for 2012 are certain and there are steps philanthropists can take to maximize their giving now so they can meet their charitable goals this year and in the years ahead.” 

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