Can a donor-advised fund reduce taxable income?
A donor-advised fund (DAF) is a vehicle that’s strategic in nature and has the objective of helping funnel your money to charity. One of the positive points about this fund is that you can lump your donations in a single fiscal year. The best asset class to contribute to a donor-advised fund is appreciated securities. That is because the IRS allows donations of appreciated securities to charity, while still granting the full income tax deduction and tax-free appreciation of the assets. With the standard deduction being so high nowadays, it is hard to ever hurdle over it. For a married couple filing jointly, the deduction amount is $27,700. So your itemized deductions have to be higher than that amount for your donations to be tax efficient. Nonetheless, the use of a donor-advised fund allows you to bundle up all of your intended donations in one tax year, allowing you to get the income tax deduction for that specific year, and then spread your donations throughout your desired time.
Have more questions? Contact Us
Missie Beach, CFP®, CDFA®
Senior Financial Advisor
Click here to schedule a consultation with one of our financial planners.
Listen to Our Podcast:
Recent posts
Share This Story, Choose Your Platform!
Wiser Wealth Management, Inc (“Wiser Wealth”) is a registered investment adviser with the U.S. Securities and Exchange Commission (SEC). As a registered investment adviser, Wiser Wealth and its employees are subject to various rules, filings, and requirements. You can visit the SEC’s website here to obtain further information on our firm or investment adviser’s registration.
Wiser Wealth’s website provides general information regarding our business along with access to additional investment related information, various financial calculators, and external / third party links. Material presented on this website is believed to be from reliable sources and is meant for informational purposes only. Wiser Wealth does not endorse or accept responsibility for the content of any third-party website and is not affiliated with any third-party website or social media page. Wiser Wealth does not expressly or implicitly adopt or endorse any of the expressions, opinions or content posted by third party websites or on social media pages. While Wiser Wealth uses reasonable efforts to obtain information from sources it believes to be reliable, we make no representation that the information or opinions contained in our publications are accurate, reliable, or complete.
To the extent that you utilize any financial calculators or links in our website, you acknowledge and understand that the information provided to you should not be construed as personal investment advice from Wiser Wealth or any of its investment professionals. Advice provided by Wiser Wealth is given only within the context of our contractual agreement with the client. Wiser Wealth does not offer legal, accounting or tax advice. Consult your own attorney, accountant, and other professionals for these services.
