As the end of 2018 draws near, you’re likely looking to close out your fiscal year. Since this is also considered the season of giving, you might be wondering just how much you can give while still receiving the tax benefit for your charitable contribution. You are not alone.
Prior to the latest tax reform many taxpayers could benefit from the charitable contributions deduction. While that hasn’t completely vanished, new laws have made it harder to utilize the deduction opportunity. Let’s take a closer look.
STANDARD DEDUCTION VS. ITEMIZED DEDUCTION
First off, if you are like two-thirds of your fellow tax payers and you use standard deductions rather than itemizing, this really won’t effect your preparation. However, those of who itemize your charitable deductions should make note that the standard deduction has increased to $12,000 for individuals and $24,000 for married couples filing jointly.
There are always changes, so don’t panic! Tax brackets have been adjusted for 2018. This is actual beneficial for many as the most of the tax brackets are lower. Additionally, maximum cash contributions to charities has 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!
There is so much to know about maximizing your charitable contributions and other deductions. If you need more information or help with your tax planning, please feel free to reach out to anyone at Purk and Associates!
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