You now have exactly twelve days to make any charitable gifts eligible for a 2018 tax deduction. But since this the is the first year that the 2017 tax changes are in effect, are there important things that have changed? Yes! Here’s a quick recap of some of the more important things that individuals and corporations need to keep in mind.
What were the tax law changes that affect charitable giving?
From a doubling of the standard deduction to the sharp reduction in estate tax, charitable giving will look a little bit different in 2018. The number of US taxpayers who will benefit from itemizing their deductions (and therefore using charitable giving as an annual tax reduction strategy) is expected to drop from 30% to 7 %. But the elimination of the Pease Limitation and the increase in the AGI threshold from 50% to 60%means that individuals who itemize can get a little more benefit from charitable gifts.
Maximizing the tax benefit of year end gifts
If you’re in the 93% of folks who probably won’t be be itemizing this year, there are a few ways to get a tax benefit from your charitable contributions. One way is to make a bunch of charitable contributions in one year, rather than spreading them out. For example, if you usually give $5,000 a year to charitable causes but that’s not enough to make itemizing worth it, perhaps you can make three years worth of contributions this year. Not only can this get you over the standard deduction threshold, but charities like it too! Donor Advised Funds are a great way to make this happen.
Don’t lose your deduction because of a paperwork mistake
There’s probably no worse holiday surprise than discovering that the donation you made turns out not to be deductible because of arcane IRS rules. The IRS released the final regulations for keeping track of your charitable deductions in July. If you’re making donations of non-cash items, deducting the charitable portion of an event ticket, or making any gifts over $250, you should probably take the time to read through it.
It’s not too late to plan
Think you don’t have enough time to hit the December 31st deadline? You actually do. Valor CSR can set you up with an Instant Corporate Foundation in less than 10 minutes! Contact us for details.