11-24-2016 Columns

Investing in Your future


Everyone benefits when you make charitable gifts

 Now that we are in the heart of the holiday season, you may be thinking about ways you can put your money where your heart is. Specifically, you might be pondering which groups you should support with charitable gifts. And as long as you choose groups that meet the right criteria, your generosity can also be rewarding to you, in the form of tax benefits.

To begin with, you will want to make sure you are giving to a reputable charity. That means you will need to ask some questions. How does a group measure its effectiveness? Is it devoting as much of its contributions as possible to the actual work of the organization, or is it spending too much money on administrative costs? Generally, a worthwhile charity should spend at least 75% of its income on programs. You may be able to find this type of information on a charitable group’s annual report and its website. You can also go to the website of one of the agencies that evaluates charitable groups. On these sites, you can get a lot of information dealing with a charity’s effectiveness, income, spending and other topics.

After you have identified a charity, or charities, you can decide how much you want to give and how you want to give it. If the charity has 501(c)(3) status (named after the section of the Internal Revenue Code that governs such groups), your gift can offer you a tax deduction. So, for example, if you are in the 25% tax bracket, and you give $1,000 to a qualified charity, you can subtract the $1,000 from your adjusted gross income, which will result in tax savings of $250. Upon making your gift, make sure you get a receipt that lists the name of the organization and the date and amount of your contribution. (Your maximum deduction will be limited to a percentage of your adjusted gross income.)

You can do more than simply write a check, however. If you have stocks that have grown significantly in value, you may want to donate them to a charitable group. You will be allowed a charitable deduction for the full fair market value of the gift on the date of the transfer, even if your original cost was only a fraction of today’s value. Furthermore, you will avoid the capital gains taxes you would have to pay if you sold the stock, provided you have held the stock for at least a year.

If you do contribute appreciated stocks, you will want to be cognizant of the effect of your donation on your portfolio. If you were to give a sizable amount of growth-oriented stocks, would it affect your overall growth potential? Conversely, if you are primarily giving away relatively conservative, income-producing stocks, would it end up moving your portfolio in a riskier direction? When donating stocks, if at all possible try to do so in a way that does not harm your portfolio’s balance.

In any case, whether you give cash or appreciated assets, you will need to make your gift by Dec. 31 if you are going to deduct it on your 2016 taxes. So be as generous as you can afford, think about the effect of your gift on your own financial situation – and be prepared to act soon.

This article was written by Edward Jones for use by your local Edward Jones Financial Advisor.

Record of success


 With the election finally over, the U.S. House of Representatives went right back to work last week. We came together to advance eight bipartisan pieces of legislation that had moved through the committee I chair, Energy and Commerce. It is part of our long-time #RecordOfSuccess in moving important pieces of legislation closer to the president’s desk for signature. I want tell you about two of these bills.

The House advanced H.R. 4665, the Outdoor Recreation Jobs and Economic Impact Act of 2016, by a unanimous vote. The outdoor recreation industry has become a significant driver of job and economic growth here in Southwest Michigan and across the country. This is why I was proud to support passage of this critical piece of legislation. It is a common-sense, bipartisan bill that will inform lawmakers on outdoor recreation policy and also help optimize business investments in the outdoor recreation industry. It is important we work together to strengthen our natural resources like the Great Lakes and also improve our outdoor recreation system.

Also the House advanced H.R. 2566, the Improving Rural Call Quality and Reliability Act of 2015, by a unanimous vote. This legislation, which I helped champion, will address persistent problems folks have here in Southwest Michigan and across the country with rural call completion issues. These call completion issues have a negative impact on local small businesses and can even pose a threat to public safety. It is time we set higher standards for the integrity of our networks. I was proud to support this bipartisan legislation and I am hopeful that the Senate will take it up soon.

To learn more about this and other important legislative issues, please visit my website: upton.house.gov.