As the year draws to a close, we want to remind you of the significant financial planning benefits that come with year-end gifting to your loved ones and charitable causes.

Gifting to Loved Ones: By gifting money or assets to your loved ones, you can reduce your taxable estate, helping to ensure that your wealth benefits your family now and in the future.

  • Tax-Advantaged Gifting: There are annual and lifetime gift tax exclusion limits that allow you to make gifts without incurring gift taxes. In 2023, you can give up to $17,000 per person without triggering gift tax.
  • Helping Your Family Now: Gifting to your family members can provide immediate financial assistance, such as helping with a down payment on a home or other important life events. There is no annual limit for covering the cost of someone’s medical expenses or school tuition if the payment is made directly to the healthcare or educational institution.
  • Estate Planning: Gifting can be an essential part of your overall estate planning strategy, ensuring your assets are distributed according to your wishes, while minimizing potential disputes among heirs.

Charitable Giving: Contributing to charitable organizations is a great way to support causes you believe in with some added financial perks.

  • Tax Deductions: Donations to registered nonprofits can qualify you for tax deductions, potentially lowering your overall tax burden.
  • Reducing Capital Gains Tax: Donating appreciated assets like stocks or other securities can minimize capital gains tax and still benefit the charity of your choice.
  • Qualified Charitable Distributions: Donations to qualified charities made directly from an IRA are tax-free and count toward satisfying your annual Required Minimum Distribution.

Quick Tips:

  • Ensure your chosen charities are recognized as tax-exempt by the IRS.
  • Keep detailed records of your gifts, including receipts and acknowledgment letters from charities, for tax purposes.

Why Act Now: To take advantage of these benefits, it’s essential to plan and act before December 31st. Delaying your gifting may mean missing out on valuable tax benefits.

Eagle Ridge is here to assist you in making the most of year-end gifting opportunities. Feel free to reach out if you have any questions or if you’d like to discuss specific strategies tailored to your financial situation.