by Kerry Meath-Sinkin, CLWS parent, Board Member, and CFP® AIF® Wealth Advisor
I hope this finds you all well! I have been part of City of Lakes since 2015, when we moved back to Minnesota with our 3-year-old son and baby girl. Since that time the community has enriched our lives in so many ways, and we are so grateful.
I’m also a financial advisor and work with individuals and families every day, helping them use their wealth to achieve personal goals while also making a meaningful impact in the areas they care about. For our family, City of Lakes is certainly one of those meaningful places. However, we also believe in being thoughtful and strategic in how we give.
With that in mind, I wanted to share a few strategies that can help you increase your contributions to our school while also saving on taxes.
Strategy #1 – Own Appreciated Stock? Consider Donating Stock Instead of Cash!
If you sell the stock and donate the proceeds, you would be required to pay taxes on the gains—whether they are short- or long-term. For long-term gains, you could face up to 20% in federal taxes, while short-term gains are taxed at your regular income rate. However, by donating the stock directly, you could potentially save thousands by avoiding these unnecessary taxes.
Strategy #2 – Consider Bunching Your Giving with a Larger One-Time Donation
Bunching your donations can be a smart strategy for those contributing $10,000 to $20,000 or more annually. In many cases, this level of giving doesn’t exceed the standard deduction, meaning donors may no longer receive the same tax benefits from their charitable contributions. Bunching involves combining or “lumping” two or more years’ worth of charitable donations into a single tax year, allowing you to surpass the standard deduction and maximize tax savings. *Please keep in mind that the Tax Cuts and Jobs Act is scheduled to expire at the end of 2025. As a result, depending on what changes are made, the most effective tax strategies for charitable giving could shift.
Strategy #3 – Over 70 ½ & Have a Retirement Account
If you or a parent or grandparent are over 70 ½ and able to contribute to City of Lakes Waldorf School, consider utilizing a Qualified Charitable Distribution (QCD). A QCD is a direct transfer of funds from your IRA to a qualified charity, as outlined in the Internal Revenue Code. The advantage is that a QCD does not count as taxable income, unlike withdrawing the funds and then donating them, which would make the full amount subject to taxes. Even if a charitable deduction is available, a QCD is usually the more tax-efficient option. The tax benefits can be significant. While Required Minimum Distributions (RMDs) aren’t mandatory until age 73, you can begin making QCDs starting at age 70 ½.
Strategy #4 – Remember to Include City of Lakes in Your Legacy Planning
Remember, you can also include City of Lakes Waldorf School in your legacy giving plans. By designating CLWS as a beneficiary of assets from your IRA, 401(k), 403(b), Keogh, or other qualified retirement plans that remain after your lifetime, you can leave a lasting impact. You can also name CLWS as a beneficiary of a Roth IRA, life insurance policy, Donor Advised Fund, or taxable investments. For those whose estates exceed Minnesota or Federal tax exemptions, this strategy can help reduce estate taxes for your heirs.
As always, please consult with your accountant or financial advisor to discuss your personal situation in more detail. If anyone is not currently working with an advisor, and I can be of assistance, please don’t hesitate to reach out to me at kmsinkin@meathwealthadvisors.com
A heartfelt thank you to everyone for all you have done—and continue to do—to help City of Lakes thrive.
With gratitude,
Kerry Meath-Sinkin CFP® AIF® Wealth Advisor
Journey Strategic Wealth LLC (“Journey”) is a Registered Investment Advisor. Kerry Meath-Sinkin is also a registered representative of Purshe Kaplan Sterling Investments, Inc. (“PKS”). In their separate capacity as a Registered Representative of PKS, Kerry Meath-Sinkin may recommend the implementation of securities through PKS instead of Journey.Securities offered through Purshe Kaplan Sterling Investments, member FINRA/SIPC. Headquartered at 80 State Street, Albany, NY 12207. Purshe Kaplan Sterling Investments and Journey Strategic Wealth d/b/a Meath Wealth Advisors are not affiliated companies. Information in this message is for the intended recipient[s] only. If you have received an email from Journey in error, we ask that you contact the sender and destroy the email and its contents. Please visit our Website for important disclosures.
This post is sponsored by Meath Wealth Advisors.