Giving You New Stuff on Giving

When Keith and I first launched TaxCoach back in 2005, we expected that as Washington tweaked the tax code over time, we would add and subtract strategy modules to help clients take advantage of the changes in the law.

We never expected that Congress would become so partisan and polarized that they could barely pass legislation naming a post office, let alone passing a federal budget (which never happened this year) or deal with emergencies like the Zika virus. So, while we’ve added modules here and there for new strategies like the domestic production activities deduction, there haven’t been any wholesale changes to the system.

At the same time, we’ve also wished we could offer more strategies for W2 employees. Unfortunately, the bulk of the planning strategies available in the code have applied to business owners.

Now we’re taking aim at both issues by beefing up our offerings in the charitable giving areas. Specifically:

  • We’re in the process of adding several new modules on advanced charitable strategies. To date, they include donor-advised funds, charitable lead trusts, conservation easements, private foundations, and using charitable gifts to convert traditional retirement account balances to Roths. We’re also planning a module on pooled income funds, which will probably be new (and exciting) to most of you.
  • We’re preparing a new seminar kit on charitable giving strategies. This will be designed for you to present to church congregations, not-for-profit boards and donors, and similar audiences. It will walk through basic rules of cash and non-cash contributions, gifts of appreciated property and life insurance, and introduce advanced strategies for big-ticket gifts like charitable trusts.
  • We’re hosting new TCU classes on charitable topics. The newest class, on pooled income funds, will be available on the site shortly. Randy Fox, editor-in-chief at the Planned Giving Design Center, hosted the class and really opened a lot of eyes to the concept and its possibilities.

These are all strategies that can increase your reach to new clients, especially high-income W2 employees. (I consulted late last year for an executive at a local publicly-traded company who was about to receive a $10 million deferred comp payout; these sorts of strategies could have eliminated tax on half of that windfall.)

These are powerful strategies, especially for those of you who offer insurance and financial services. A well-planned charitable giving strategy can easily pay for itself, especially if you use part of the tax savings to finance wealth-replacement vehicles like life insurance.

Finally, charitable giving strategies are incredibly flattering and can help build tremendous goodwill with clients. Don’t overlook how important this can be, even if they aren’t already charitably inclined. What business owner wouldn’t love to see himself as the head of a family foundation, or with her name on a classroom or professorship at her alma mater?

Keep us posted and let us know what you think of the new materials. Remember, success stories are never off-topic!