ACT for Alexandria

Donor Advised Funds and the New Tax Law

Did you know you can use donor advised funds to address different income tax implications?  Of course, most people use donor advised funds, also called DAFs, as a philanthropic tool.  People set up DAFs with ACT because they want a partner who can help increase the effectiveness of their giving and they want to be a part of a collective effort that is strengthening our community. 

In light of the new tax law, there are additional benefits to donor advised funds.  Given the increase in the standard deduction, you can “bunch” multiple years’ worth of donations in a single year to receive maximum tax benefits for your charitable contributions.  You can also make a “qualified charitable deduction” from your individual retirement account (IRA).  IRA distributions that go directly to a charity are tax-free up to $100,000 per year.

We have two new resources on these topics: 

Bunching Donations in a Donor Advised Fund

IRA Qualified Charitable Distributions: How We Can Help

You can also contact Betsy Micklem at 703-739-7778 for more information.  Please consult your financial advisor or tax consultant to determine the best option for your situation.