Saturday Critical Action – Bunch Charitable Contributions
Welcome to the Saturday Critical Action. Each Saturday we take the weekly action from Jonathan Clements‘ blog Humble Dollar and “militarize” it for you. Jonathan Clements was a longtime personal finance columnist for The Wall Street Journal, and he offers great advice at the best price you can get…free. Here is this week’s critical action:
BUNCH CHARITABLE CONTRIBUTIONS. The 2017 tax law’s higher standard deduction, coupled with the $10,000 cap on deducting state and local taxes, means you may not get any tax benefit from charitable gifts. One possibility: Bunch, say, three years of contributions into a single tax year. You might even set up a donor advised fund and spoon out gifts from there.
This happens to be exactly what we did at the end of 2017 to get a tax deduction for our contributions for the next 2-3 years. We have two donor advised funds, one at Vanguard and one at Fidelity. Vanguard requires a higher minimum contribution to start ($25,000) and a higher minimum donation ($500), while Fidelity’s initial contribution ($5,000) and minimum donation ($50) are smaller.
Now that I’ve used both, I probably would have just gone with Fidelity due to the lower minimums, but I have a man crush on Vanguard and couldn’t help myself. While their higher minimums are a steeper hill to climb, I have more faith they’ll efficiently invest my money.