Charitable Giving After The Tax Reform – Part 2
A couple of weeks ago, we talked about the Tax Cuts and Jobs Act of 2017and what that means for charitable giving. To RECAP…
The new tax law raises the standard deduction in 2018 to $24,000 for married couples filing jointly, $18,000 for heads of household filers, and $12,000 for single taxpayers. There is an additional standard deduction of $1,300 for each married person over age 65 ($1,600 for single taxpayers). The legislation limits the deduction for state and local taxes to $10,000 and eliminates many other deductions.
Here’s what the Tax Cuts and Jobs Act — which will apply to taxpayers starting in 2018 — means for charities and the people who give to them:
- Try ‘bundling’ donations from several years into one year
- Charities are bracing for a big drop in donations
- Open or add to a donor-advised fund to get a deduction — even if you don’t itemize
- If you’re 70½ or older, consider a qualified charitable distribution from an IRA
- People can now give more of their cash to charity
In this email we will focus on the first bullet, Try ‘bundling’ donations from several years into one year. What does this mean? As of January 1, donors should consider giving twice as much to charities in one year, even if that means giving nothing the following year. This will help taxpayers accumulate enough deductions to itemize and write off more than the standard deduction. Charitable deductions are only beneficial insofar as total itemized deductions exceed the standard deduction.
If you have any questions or want more information, call Scott Hartman at 614-443-8893 or email him at email@example.com.
*In need of a Tax Professional, Financial Planner, or Estate Planning Attorney to help you navigate the new tax laws? Contact us for a referral of one of the members of our Professional Advisors Group.