The Surprising Tax Benefits of Donating Stock in 2021
Despite the dizzying social and cultural disruptions we collectively experienced in 2020, the U.S. stock market closed at all-time highs. If you made money in the stock market last year, you already have a good idea of what you’ll owe when Tax Day rolls around. If you're like most investors, that tax bill might sting a little.
Stock donations are a lesser-known way to reduce your tax bill, and now is the perfect time to learn how to give smarter.
Rethinking How We Give
In contrast to the success of the 2020 stock market, the global pandemic has created an unprecedented need for charitable giving. Unfortunately, the resulting shutdowns have had a profoundly negative impact on most non-profits' bottom lines. Without traditional fundraising avenues of live events, most non-profits are struggling to keep pace with demand.
A Smarter Way to Donate
Cash donations still dominate the giving landscape, but as donors are becoming aware of new ways to make the most of their charitable giving. Stock donations offer an ideal solution that allows you to avoid the tax on the gain while deducting 100% of the value of the contribution. Non-profits also benefit from pre-tax donations that would otherwise be diminished by taxes.
Some surprising benefits of donating stock include:
- Avoiding capital gains tax (ranging from 15-35% based on where you live) you would otherwise pay if you sold the stock.
- Getting a bigger deduction by making pre-tax stock contributions.
- Feeling good that the non-profit organization you support keeps the money that otherwise would have gone to the IRS.
Put Stock in Something that Matters
If you’d like to double (or triple) your tax savings while helping the charity of your choice, DonateStock makes the donation process simple, secure and free. Find a non-profit you’d like to support and start making tax-advantaged stock donations in 10 minutes or less.
*Disclaimer: we are not tax advisors so please consult a tax professional for your tax needs.