Charitable giving is a whole new ballgame for taxpayers now that most itemized deductions have been reduced or eliminated and the standard deduction has nearly doubled. This will likely prompt a lot of taxpayers to adjust their charitable giving tax plan this year.
Luckily, with a little extra planning you may still get beneficial tax treatment when you donate. Here are some helpful tips:
• Plan ahead. Determine how close you'll get to your 2018 standard deduction threshold of $12,000 per person ($24,000 per joint return). Remember to consider your typical charitable contributions when you estimate your potential itemized deductions.
• Consider bundling. Think about moving two years of charitable giving into one year. This will give you a chance to itemize deductions in the year of maximum giving and use the tax savings of the standard deduction in the other year for your donations.
• Make tax-efficient donations. If you donate appreciated stock that you've held longer than one year, you can avoid paying capital gains. Plus, you can deduct the fair market value of the stock as a donation.
Contact us to learn more about how you can create the best charitable giving plan for your situation.