Have you given your fair share?
If you’re like most of us, your inbox has been filled with requests to donate to charitable organizations since Thanksgiving. It is the season of giving and also the time to get those end-of-the-year donations made in time to take advantage of the tax benefit for the fiscal year.
Since President Trump’s tax reform in 2018, many people are still a little confused on how much of those donations they can use as a tax deduction.
STANDARD DEDUCTION VS. ITEMIZED DEDUCTION
Approximately 2/3 of taxpayers use standard deductions rather than itemizing. In this case, the reform hasn’t really effected tax preparation. However, if someone itemizes they should note that the standard deduction has increased to $12,000 for individuals and $24,000 for married couples filing jointly.
Everyone is happy when they earn more money until it comes time to pay taxes. Contrary to popular complaints, the 2018 adjustment to tax brackets benefited most Americans since many of the tax brackets are lower. Additionally, maximum cash contributions to charities have increased from 50% to 60% of AGI. The cap on non-cash contributions is 30%.
ALLOWABLE DONATIONS VS. NON-ALLOWABLE DONATIONS
The laws pertaining to allowable vs. non-allowable donations remain mostly unchanged. While you can still deduct donations to 501(c)(3) charities, you cannot deduct contributions if you received a benefit. Furthermore, you cannot deduct your time or service as a nonprofit volunteer. However, we always encourage giving back the community!
For more information about charitable giving or any tax-related topics, please feel free to reach out to anyone at Purk and Associates!
Happy New Year!