Release date: 12/19/2017
Is This the Last Year to Deduct Your Charitable Gifts?
For many of us – an estimated 30 million people - this is the last year that your charitable gifts can reduce your taxes.
The tax bill being finalized by Congress nearly doubles the standard deduction, while eliminating many popular itemized deductions, and capping deductions for state and local taxes at $10,000.
After this year most households will not be able to reduce their taxes by itemizing.
If you are an average middle-class taxpayer who is losing the ability to itemize your deductions, consider this immediate action. You can ‘front load’ your giving by creating or adding to a donor advised fund at the Community Foundations of the Hudson Valley and then recommend grants from the fund to charities in the future years.
You can open a fund for as little as $5,000 at the Community Foundations of the Hudson Valley. You can then deduct your gift as part of your itemized deductions on your 2017 tax return.
Ask your accountant, but the best asset to donate is usually long-term appreciated property or stock that, if you sold, would result in capital gains tax. Long-term usually means you’ve owned the asset for more than a year. You get a charitable tax deduction for the property's value on the date of its transfer, and you won’t pay tax on the asset’s growth.
If you will not be able to itemize after this year, don’t donate more than you can deduct this year! The cap is 30% of your adjusted gross income (“AGI”) for charitable gifts of appreciated stock, and 50% for cash gifts. Always check with your tax advisor.
So, if you want to give to charity this year, next year, and beyond, and can take the charitable deduction now, call us about opening or adding to a donor advised fund today.