Many Americans give to charitable causes, but very few know about or take advantage of a powerful giving tool called a donor advised fund (DAF). DAFs offer several tax benefits that you should be aware of.
Let’s start with the basics: A DAF is a tax-deductible financial account you can use to support any tax-exempt charitable organization and then get an immediate tax deduction. Donations do not get allocated to the charity or charities of your choice until you say so, however.
Thus, you can donate to the DAF one tax year, get the donation as a tax write off, but then wait to allocate the money to a charity until a later tax year. This offers a lot more flexibility for tax planning purposes than donating directly to a charitable organization.
Figuring out the exact amount to donate one year versus the next to maximize tax savings can get tricky, but we can help you make those calculations.
Again, the beauty of a DAF is that it gives you options otherwise unavailable.
Another perk of using a DAF is that you can put funds into it that can be invested and grow tax-free, so you could use the additional dollars to give even more to your favorite causes.
If you give to numerous charities, a DAF can also make record keeping easier, because you will get just one charitable giving receipt at the end of each year – from the DAF – as opposed to an individual receipt from each of the recipient charities.
To learn more about DAFs, the tax advantages they offer, and to get started using this amazing tax tool today, call us at 706-632-7850 or email our office manager Kimberly Mortimer at firstname.lastname@example.org.