Better to Give Now (2010) vs. Making Charitable Contributions Later (2011)

Call me a law nerd if you want, but I spend a lot of time thinking about legal strategies. I know my clients will thank me for it.

Here’s something advisors need to consider: Taken from a tax standpoint, would your high-net-worth clients be better off making large charitable contributions in 2010 or 2011?

Two Good Reasons to Do It Now

First, income tax rates in 2011 are set to top out at 39.6%, compared to a top rate of 35 percent in 2010.

Second, the capital gains tax will increase from 15% to 20%. This may be limited to folks with incomes over $250,000, but that depends on future legislation.

Usually, taxpayers save more from charitable contributions when tax rates are high. However, that may not be the case after 2010.

continue reading for the complete analysis!