by Rick Oldenburg, CAP®
The question asked a lot this year is: “Will the new tax law hurt me in my deductions to charity?” To respond, one must know several things: 1) Did your Itemized deductions beat the Standard Deduction in past years? 2) Why do you give to charity in the first place?
The last question is the controlling one. Most people give because they believe in the charitable purpose of the nonprofit. The tax deduction is secondary, but a nice benefit. The first question is a bit trickier, if you gave to charity, had interest, taxes and other deductions exceeding the former threshold, then itemizing worked in your favor. With the Standard Deduction nearly doubled for 2018, itemizing will be more challenging. However, by giving larger gifts coupled with the few remaining deductible expenses, itemizing may still benefit you.
It is estimated that the vast majority of prior itemizers will no longer beat the standard deduction limits. The biggest advantage for donors is that most will not need to carefully track their donations any longer which will save them time when they file their returns. It should simplify the process.
Will the higher standard deduction threshold affect the way you give? Those wonderful nonprofit organizations need your continued support of their missions. Community Health Care and many other charitable organizations are counting on year-end gifts to keep their mission-headlights burning brightly.