Income Tax Charitable Deduction
Taxpayers who itemize deductions can claim a charitable deduction for a portion of the original gift. This deduction can result in significant income tax savings. In short, the deduction is equal to the amount of the contribution less the present value of the payments that will be made to the donor and/or other beneficiary during life. The present value of those payments is determined using IRS tables regarding life expectancy and assumed earnings, and taking into consideration the amount contributed and the gift annuity rate.
There is a variety of software that provides accurate tax calculations. All charities that offer gift annuities can provide these calculations to individuals who are exploring whether a gift annuity is appropriate for them, and many of those charities have calculators on their web sites that allow potential donors to enter basic information and see how their income tax situations might be affected by a charitable gift annuity agreement.
Click here for links to web sites of organizations that are members of the American Council on Gift Annuities and offer charitable gift annuities.