Sacramento County Accountant On: “How To Handle All These End-Of-Year Giving Requests”

"The only way to get positive feelings about yourself is to take positive actions. Man does not live as he thinks, he thinks as he lives."
– Vaughan Quinn

The other day, I received probably the 20th "Consider including _____ in your holiday giving plans" request of the season. I’m not tired of it (in fact, I welcome it), but it’s also pretty clear that these 501(c)3 organizations all sort of "get" simple tax planning!

So as a tax professional, it warms my heart to see all of that deductibility flying around through mailboxes and the interwebs, and I’m especially happy when I see clients step to the plate and actually give.

Last week, I wrote about those inevitable "last-minute tax moves" we tax professionals always spout off about around this time of the year, and (surprise, surprise!) one of the options was increasing your donations.

But I wanted to address this a little more specifically — because donating for tax purposes is good (VERY good) … but there are better reasons. In fact, the current White House administration continues to scrutinize reducing the deduction rate for charitable donations, as it seems to do every year around this time.

So we might as well consider what it would look like to give with a smaller tax deduction incentive for doing so (though I should hasten to add that these proposals are not yet set into law).

Jim J. Ornelas’s
"Real World" Personal Strategy

3 Reasons To Give Money Away, With or Without a Tax Deduction

There’s something that happens to your soul when you cut a big check to someone in need.

You signal to those very fears and desires which so often control your unconscious thoughts: "Money doesn’t rule me. I have more than enough, so much more than enough that I’m giving it away." Then, of course, something special often happens: more money seems to find itself in your hands.

I’m not advocating a mystical pay-it-forward scheme; I’m simply making the observation over years of being a student of how money "works". And, "coincidentally" it just seems to find itself in the hands of those who give it away.

Why is it that those who are benevolent seem to be well-taken care of, even rich? I know many families of significant means who were NOT wealthy when they started to give in large percentages of their income (15%+). Coincidence?

So I’d say that this first dynamic is one significant reason to give: Your soul is set free from the shackles of fear and greed.

Here are two more big reasons:

2) You build a network of grateful friends and organizations.
You’ll never know when someone to whom you’ve donated or given (be it time, money, connections, or other resources) comes back to you with something you need, at just the right time.

Personally, I’ve seen this dynamic in play enough times to not dismiss it. When you act or give generously, it’s the most powerful form of networking on the planet. Obviously, there are better, less self-interested reasons to give … but there sure are worse ones.

3) Your perspective can shift in an instant.
When you don’t just give money, but also time and heart, you often learn heretofore unrealized reasons for being grateful about your own present circumstances.

Sometimes giving to institutions that work with the poor can bring home appreciation of your own enormous wealth. And it can also bring home awareness of a poverty which isn’t solved through adding zeroes to a bank balance. But either way, if you do it right, you are changed for the better.

With these reasons, AND the monetary benefits to your tax return, I urge you: stretch yourself this month. Give more than you think you should. See what happens.

I promise it’ll be good.

All this said, above, I firmly advocate for being careful with your planning of said giving. I don’t suggest impulsivity, just some small risk-taking.

But don’t risk losing out on the tax advantages to gifting appreciated stock, or other, less common, forms of gifting. Shoot me an email, or give us a call (916) 481-1025 if you want to discuss the tax implications of your year-end giving. It is, after all, what we do.

Jim OrnelasSacramento County Accountant On: “How To Handle All These End-Of-Year Giving Requests”