Darren Hardy, publisher and founding editor of SUCCESS Magazine and the New York Times bestselling author of The Compound Effect, has endorsed the book: “It’s time to advance from success to significance. Your life can be a ‘living legacy’. Greg and Ron will be your guide and this book is your manual to a life of purpose, valuable contribution and soulful reward–a life you can be proud of.”

You Can Do More That Matters, Greg Hammond CFP, CPA, Ron Ware J.D.

 To be among the first to hear about our book release, learn about resources, and purchase your own copy at a discount, join our e-mail list today by sending your name and contact information to info@hammondiles.com.

 “We hope to encourage you to think differently about your money and your passion. To motivate you to assess what you are capable of doing to address the concerns and needs that move you. To act differently as you discover what you’re actually able to do.”

Donors can improve their own financial picture; have more for family, other loved ones and charity. 

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Charity is the easy answer.  You have a choice, charity or the IRS. What’s puzzling is that while people have the opportunity to execute financial and estate planning that eliminates the federal government from receiving their wealth, most choose not to.  According to the Center on Philanthropy at Indiana University about 67% of households in the United States give to charity each year. However, only 8% report leaving a charitable bequest in their wills and therefore end up giving more to the government than to charity.

Webster’s Dictionary defines a philanthropist as “a benevolent supporter of human beings and human welfare.”  Typically we think of philanthropists as the mega-wealthy – Bill Gates, Warren Buffett, the Carnegie or Rockefeller families. A taxpayer is defined as “Someone who gives up one sixth of their capital gains or one half of their family wealth to support the general welfare of our country.”  The United States tax code makes all of us philanthropists. Choose to do nothing and let federal income and estate taxes make the decision for you or plan how you want your social wealth to be spent.

There is a general misconception about where charitable giving comes from within your wealth picture.  For example there are two parts: Social Capital and Financial Capital. You may think Social Capital is the amount paid to the IRS and Financial Capital is what passes to heirs.  If a charity suggests that you make a current gift or planned gift to benefit them, you may picture that gift coming from your Financial Capital and reducing the amount for your heirs.  As a result, you don’t take action and don’t include charity in your planning. Charity doesn’t have to reduce your family’s share of wealth. The Social Capital portion can be redirected to charity, disinheriting the IRS. Amazingly, you can use this technique to potentially increase your income, leave more for your heirs and give more to charity.

The skillful blending of the three dimensions of your wealth – Financial, Personal and Social allows you to build a legacy of your values, influence, and money so you can truly make a difference in the world.

Greg Hammond, CFP®, CPA is a wealth impact strategist who works with women, families, closely‐held and family‐owned businesses, helping them grow and preserve wealth, plan for retirement and  manage their charitable giving. You can reach Greg at 1-800-416-1655 or info@hammondiles.com  for financially intelligent guidance or a Wealth Impact Assessment to show how you can skillfully blend the three dimensions of your wealth to build a legacy of your values, influence, and money.

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Moving beyond the financial and into the personal dimension of wealth, ask yourself “What is important about money to me?”  When I ask my clients, their answers initially tend to be safety, security and financial independence.

Have you ever thought; “If only I had more money I would…”  Most answers fall into two categories – dreams and lifeprints. I find that most people have the capacity to fulfill their dreams, but haven’t given themselves the freedom or permission.  Isn’t it a pity to have the ability to accomplish your dreams but never try?  Oliver Wendell Holmes said it’s like “going to your grave with the music still in you.”

Lifeprints, similar to fingerprints, are the unique marks or legacies you build during your life and leave behind as a sign of your life on earth.  Typically, lifeprints affect people, causes or institutions. My business partner Scott and I feel very strongly about this and our mission statement reflects it. Our core values led us to adopt the Connecticut Children’s Medical Center as one of our charities of choice and it’s one of our Lifeprints.

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Take a moment to think about the five most significant events in your life and a few things immediately pop into your mind.  For me, it was my wedding day and the births of our two daughters.  People rarely site money or financial events in the top five, so when I talk about wealth and the planning related to it, I refer to three dimensions- financial, personal and social.

The financial dimension consists of your net worth, money and investments, income and expenses. If wealth consisted only of the financial dimension, then wealth planning would simply be a series of business decisions to review and adjust periodically.  I find that 99% of financial plans people bring to me for a second opinion stop right there.  And that creates a problem.

A friend and colleague of mine who teaches continuing education for financial, legal and estate planning professionals asked them how many of the plans they present actually get implemented. Most said only 2 out of 10. He then asked “Why do you think that is?” Their answers varied, ranging from complacency, procrastination and being afraid of dying to being afraid of doing the wrong thing.

I disagree. The problem is that most financial and estate plans address only the financial dimension of wealth. If we merely look at the numbers, it’s just not that exciting.  Although some have a fascination with numbers, I find most people think that’s not a lot to motivate anyone to act.

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Charitable giving provides benefits for the non-profit organization receiving the gift and for you.  You can free up additional funds for charitable giving by being more effective with your charitable donations   Are you currently giving in the most efficient and beneficial way?  Avoid these 5 common mistakes so you can give more and make a greater impact on the non-profit organizations and causes you care about.

5. Failing to Plan for Impact by Diversifying Your Donations

Diversifying your investment portfolio can be a good thing, but diversifying your charitable giving can lead to unfocused donations with little impact.  When you give to support an organization or cause, you are hoping to help them make a difference.  Certainly, a number of small donations can add up, but have you taken time to  consider what type of impact you want to make?

Rather than sprinkling and dividing your charitable donations to a variety of non-profits, consider taking time to think about the type of change you are passionate about.  Then consider focusing your donations on a single or a few charitable organizations to make a greater impact tied to your passion. For example, if you care deeply about children, you may want to change lives by supporting a child in need somewhere in the world, give a child the gift of reading by aiding a children’s literacy program, or give to your local children’s hospital.

Instead of giving money here, there and everywhere, take some time to think and plan—and then give. You will make a greater impact on the organization or causes you support and you will receive greater satisfaction from the change you are making in our world.

Charitable Giving Mistakes – Part 1 
Charitable Giving Mistakes – Part 2
Charitable Giving Mistakes – Part 3
Charitable Giving Mistakes – Part 4

The post Charitable Giving – 5 Mistakes to Avoid – Part 5 appeared first on Hammond Iles.

Charitable giving provides benefits for the non-profit organization receiving the gift and for you.  You can free up additional funds for charitable giving by being more effective with your charitable donations   Are you currently giving in the most efficient and beneficial way?  Avoid these 5 common mistakes so you can give more and make a greater impact on the non-profit organizations and causes you care about.

4. Not Using the IRA Charitable Rollover

Included in the 2012 American Taxpayer Relief Act was the re-establishment and extension of the IRA Charitable Rollover for individuals over the age of 70½.  If you meet this age requirement, you can make tax-free distributions of up to $100,000 from an Individual Retirement Arrangement (IRA) directly to a non-profit organization without recognizing the distributions as taxable income.  In addition, the distributions count towards your required minimum distribution for the year. Due to the fact that the rollover distributions are pre-tax dollars and are not recognized as taxable income, you do not receive a charitable giving tax deduction.

Making a rollover can potentially provide a number of benefits.  First, by the IRA distribution to a non-profit being excluded from taxable income, you may realize additional tax savings by avoiding or reducing the potential phase-out of your tax deductions.  In addition, by having a lower federal taxable income you may save more on your taxes if you live in a state with income taxes.  Lastly, if you file a simplified tax return and only use the standard deduction, you do not get a tax deduction for the amount you donate to non-profits. However, the IRA Charitable Rollover allows you to reap the benefit of a lower taxable income, even if you do not itemize your deductions.

Charitable Giving Mistakes – Part 1
Charitable Giving Mistakes – Part 2
Charitable Giving Mistakes – Part 3

The post Charitable Giving – 5 Mistakes to Avoid – Part 4 appeared first on Hammond Iles.

Charitable giving provides benefits for the non-profit organization receiving the gift and for you.  You can free up additional funds for charitable giving by being more effective with your charitable donations   Are you currently giving in the most efficient and beneficial way?  Avoid these 5 common mistakes so you can give more and make a greater impact on the non-profit organizations and causes you care about.

3.  Donating an Investment Held Less Than One Year or That Has a Loss

As we stated in mistake #2, donating an appreciated investment, such as  a stock or mutual funds, can be a great way to save twice on your taxes with just one charitable gift.  However, you must have held the investment for a full year in order to deduct the fair market value.  If you have not held the investment for a year, you can only deduct what you paid for it.  In the previous example where you purchased a stock for $7,000 and donated it when it was worth $10,000, if you had owned the stock for less than a year, you would only get a charitable giving tax deduction of $7,000.

It is also a mistake to donate an investment that has lost value.  If you initially paid $12,000 for a stock that is now valued at  $10,000, you will only receive a tax deduction for the fair market value.  In this situation you are better off selling the stock, realizing the capital loss for your taxes and then using the proceeds to make the charitable donation.

Charitable Giving Mistakes – Part 1
Charitable Giving Mistakes – Part 2

The post Charitable Giving – 5 Mistakes to Avoid – Part 3 appeared first on Hammond Iles.

Charitable giving provides benefits for the non-profit organization receiving the gift and for you.  You can free up additional funds for charitable giving by being more effective with your charitable donations   Are you currently giving in the most efficient and beneficial way?  Avoid these 5 common mistakes so you can give more and make a greater impact on the non-profit organizations and causes you care about.

2. Giving Cash vs. Appreciated Investments

When you receive a charitable giving donation request in the mail or over the telephone, do you pull out your checkbook, credit card, or debit card to make a contribution?  By doing so you could be giving up an additional tax benefit.  Instead of writing a check, you could donate an appreciated stock, mutual fund or other appreciated asset and receive two tax benefits with a single gift.  When you donate an appreciated investment you not only receive a deduction for the gift, but you also avoid the capital gains taxes you would have paid by selling the investment.
For example, if you donate $10,000 in cash to your favorite charity you potentially receive a charitable giving deduction for $10,000. However, by donating a stock valued at $10,000 that was originally purchased for $7,000,  you receive a charitable deduction for the $10,000 full market value of the stock and also avoid capital gains tax on the $3,000 that the stock appreciated since purchase.  This could save you up to 20% of the capital gain.  Why not save on both income and capital gains taxes with the same gift?

What if you don’t want to donate the stock because you like how it has performed and you plan on owning it for a long time.  In this case, it still makes sense to donate the stock and use the cash allotted for the  donation to re-purchase the stock.  This way you avoid the current capital gain on the stock and establish a higher cost basis for it, thus reducing your future capital gain.

Charitable Giving Mistakes Part 1 

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Charitable giving provides benefits for the non-profit organization receiving the gift and for you.  You can free up additional funds for charitable giving by being more effective with your charitable donations   Are you currently giving in the most efficient and beneficial way?  Avoid these 5 common mistakes so you can give more and make a greater impact on the non-profit organizations and causes you care about.

1. Not Keeping Accurate Records for Gifts

In 2012 the Tax Court upheld a decision by the IRS to deny a taxpayer a charitable deduction for $22,517 in contributions made to his church.  The reason was that he did not receive the proper acknowledgement of his contributions in a timely manner.

Having voided checks or a simple receipt may not be sufficient to support your charitable deduction.  For gifts under $250, a cancelled check or bank statement is enough.  For larger gifts, the charity must provide a contemporaneous written receipt or letter that states the name of the organization, the date and amount of the donation and whether any goods or services were given to you as a result of the gift.

In the court case mentioned above the taxpayer did go back to his church to obtain the proper acknowledgement of his contributions.  However, the court did not accept the second acknowledgement because it did not meet the contemporaneous written acknowledgement requirement.  The IRS defines contemporaneous as the earlier of the date of filing or the extended due date,including extensions, of the tax return.  If you have not filed your tax return for last year you still have time to obtain a proper written acknowledgement for contributions you made to a charity.

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As there was no last-minute agreement between Congress and the White House to postpone federal budget cuts scheduled to take effect March 1, the ax now falls. Unless a bipartisan effort somehow undoes them, assorted federal government agencies will have their budgets reduced by $85 billion between now and October 1, as the initial step in a planned $1.2 trillion deficit trimming over the next ten years. (The belt-tightening could have been more severe: without January’s fiscal cliff deal, it would have been $109 billion.)1,2

What gets cut? Broadly speaking, defense programs will take a 13% hit and other federal programs will have budgets decreased by 9%. (This is according to the projection of the White House Budget Office.)2  Government contractors may be among the first to feel the pinch – especially defense contractors, and by extension their vendors. The White House projects the Army, Navy and Air Force having to slash a total of $34 billion this spring and summer, resulting in layoffs or furloughs for 450,000-500,000 workers. USA TODAY forecasts that four states – Virginia, Maryland, Texas and Alabama –will each see between 20,000-35,000 jobs lost as a direct result.3

Some think that the punch to the labor market might end up being double or triple that. A George Mason University analyst recently commented to the New York Times that as many as 1.4 million private sector jobs could be lost when the effects of the sequestration are fully felt, with a third of them coming at small companies.3,4

This potential wave of unemployment wouldn’t just be traced back to military cuts: the Obama administration has mentioned TSA agents being furloughed every tenth workday, FAA air-traffic controllers and Bureau of Prisons employees working fewer hours, and job cuts or reduced workweeks affecting the FBI, INS, FDA, NPS, VA and FHA. State programs linked to federal dollars (such as unemployment benefits, Section 8 housing assistance, foster care programs, Head Start and school breakfast programs, and Meals on Wheels and job retraining programs for seniors) could also soon see cutbacks. Cuts for many of these programs would begin in April.1,2,5

What will escape cuts? While myriad government agencies will face reduced budgets, the cutbacks will not reduce Medicare, Social Security or Veterans Affairs benefits, Supplemental Security Income, Medicaid payments, Pell grants or food stamps. In addition, Medicare Part D subsidies will not be cut.6

That does not mean Medicare or Social Security recipients will escape the impact of the sequestration. Some SSA offices might close on certain days of the month or even for weeks or months – and the lines and waits at those offices could get longer. Medicare payments to doctors are slated to be reduced 2%.6

Is there an undo button? Sort of. Congress might find it later this month, or in April, arranging a short-term fix, much like when the fiscal cliff bill passed.  Taxes could be raised here, pork could be trimmed there, and a little more time bought … time that could be used to improbably craft the “grand bargain” President Obama spoke of in 2012, or to give federal agencies a greater say in what gets cut. After a few weeks of sequestration, f respondents saying deficit reduction should be a top federal priority.⁷

1 - www.reuters.com/article/2013/03/01/us-usa-fiscal-idUSBRE91P0W220130301 [3/1/13]
2 – abcnews.go.com/Politics/OTUS/questions-answers-sequester/story?id=18623605&singlePage=true [2/21/13]
3 – www.usatoday.com/story/news/nation/2013/02/19/army-state-by-state-sequester-details/1931051/ [2/19/13]
4 – boss.blogs.nytimes.com/2013/02/21/many-expect-budget-cuts-to-hit-small-businesses-hard-but-not-the-n-f-i-b/ [2/21/13]
5 – www.civilrights.org/census/your-community/funding.html [3/1/13]
6 – aarp.org/politics-society/government-elections/info-02-2013/how-the-sequester-could-affect-social-security-and-medicare.html [2/19/13]
7 – www.cbsnews.com/8301-250_162-57570484/poll-40-say-let-the-looming-budget-cuts-happen/ [2/21/13]
This material was prepared by MarketingLibrary.Net Inc., and does not necessarily represent the views of the presenting party, nor their affiliates.

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