Schwab Charitable Talks Tax-Efficient Giving Strategies In 2020

Fred Kaynor, Vice President of Marketing and Business Development, Schwab Charitable, Michael Townsend, Vice President of Legislative and Regulatory Affairs, Charles Schwab, and Hayden Adams, Director of Tax and Financial Planning, Schwab Center for Financial Research, weigh in on tax planning and strategies for giving in 2020.

Despite 2020’s unprecedented levels of uncertainty and market volatility, total charitable giving is trending up. Schwab Charitable reportedly saw a notable increase in both dollars granted number of grants to charities compared to last year’s figures. Continued political uncertainty, the positive tax and market environment, and well as increased need, makes 2020 an especially great year for clients to give.

Over the last few years, The Tax Cuts and Jobs Act, enacted in 2018 and the CARES Act (The Coronavirus Aid, Relief, and Economic Security Act), enacted in March of 2020, have brought major changes to the way individuals file taxes. The Tax Cuts and Jobs Acts simplified the tax filing process through raising the standard deduction, but also retained the charitable deduction for those who itemize.

For those that plan on taking the standard deduction, but have considered itemizing, Schwab Charitable recommends a strategy called “bunching or “concentrated giving.” This means giving a greater amount to charity every few years, itemizing those gifts, and then taking the standard deduction the other years.

The CARES act (The Coronavirus Aid, Relief, and Economic Security Act) also offers additional tax incentives for cash donations in 2020. For those who take the standard deduction, donors may claim up to $300 for cash contributions. Helping clients identify opportunities to give more to the causes they care about through the benefit of “bunching their giving” or leveraging retirement assets, can help advisors build deeper, long-term relationships.

Schwab Charitable is an independent public charity aimed around making it easier for donors to give. Through Donor Advised funds, contributors can donate both cash and appreciated securities for a tax advantage. With low account minimums relative to private foundations, this strategic and tax-efficient way of giving is accessible to the every-day-investor.

To learn more, register for Schwab Charitable’s webcast: Post-election tax strategies for charitable giving — what advisors need to know.

With the election behind us, what will be the impact on tax provisions for charitable giving? Join a panel of experts from Charles Schwab and Schwab Charitable who will discuss:

  • The current political landscape
  • The potential impact on tax benefits for charitable giving
  • Tax-smart giving strategies to integrate into your clients’ wealth management plan