What The New Tax Law Means For Your Charitable Giving
Posted on: December 14th, 2018
Following is a summary taken from a recent Forbes article on some attractive giving options and techniques to consider in lieu of itemizing deductions:
Bunching or bundling itemized deductions
Donors having the flexibility to time the payment of qualifying deductible expenses may want to consider bunching or bundling these expenses, including charitable gifts, into alternate years. This may increase the likelihood of being able to itemize deductions in alternate years. If you make charitable gifts this way, you could notify the charity that your larger gift is for a two-year period.
Donor-advised funds
With this technique, you can make a large contribution in one tax year to establish or add to a donor-advised fund. If the gift is large enough, you may be able to itemize deductions that year. In subsequent years, when your deductible expenses are not large enough to itemize, you may continue to make a distribution to a favorite charity, thereby continuing your support to it. We can assist you in setting up a donor-advised fund here at the Community Foundation.
Charitable rollovers or qualified charitable distributions
Taxpayers who are 70 ½ or older and required to take minimum distributions from their retirement accounts may request that the plan administrator make a distribution directly from their account to a qualified charity. If done correctly, the income won’t be added to taxable income, but you won’t receive a charitable contribution deduction either. Although it’s a wash for the taxpayer, the charity receives a nice contribution.