Monday, December 10, 2018

Charitable Giving

Charitable Giving after the Tax Cut and Jobs Act of 2017

Under the new tax act, the standard deduction has been raised to $24,000 for a married couple.  As such, many taxpayers will not reach this deduction threshold thereby losing the tax benefits of charitable giving. Experts estimate that the raise in the standard deduction will lower charitable giving by more than 13$ billion per year. 

Although this change may affect standard charitable giving, charitable gifting has shifted to other methods that still provide advantageous tax benefits. One popular way to donate post Act is the gifting of the required minimum distribution (RMD) from an IRA.  Donating this RMD can allow one to gift an appreciable asset and avoid the tax on the appreciation. Another method of charitable giving that has gained popularity is the Donor Advised Fund.  Donor advised funds (DAF) allow one to reduce tax burdens after a windfall situation by taking the immediate tax deduction when you make a donation to your DAF.  Also, contributions of appreciable assets to a DAF can eliminate capital gains under certain guidelines. 

If you wish to make a charitable donation, the attorneys of Morris Law Group can help you structure an effective charitable plan.