Things to Consider on the New Tax Law with Charitable Contributions
The new tax law does not change the rules for charitable contributions; however it has changed the dynamics of the tax environment, such that fewer people will get a benefit from these contributions. How that will change charitable giving is anyone’s guess, but there are some things you can take advantage of to get the most from your deduction.
If you are older than 70 1/2 , you can transfer up to $100,000 each year directly from your IRA to the charity of your choice. This transfer can count as your RMD for the year and it also lowers your adjusted gross income which can provide host of benefits.
For those who will be close to the increased standard deduction limit, consider bunching charitable contributions and other deductions into one year to maximize their benefit. Anyone who was previously phased out of some of their charitable deductions will see an increase in allowable deduction. The maximum amount deductible will increase from 50% of AGI to 60% of AGI for 2018.
If you have any questions about these or other changes in the tax law, feel free to call our office.