Many people like to support their favorite charity, either with lifetime gifts or in their estate plan. However, the new tax law in effect for 2018 does change some rules on charitable giving that may change the way you want to give.
One major change in the tax code is that the standard deduction was increased (and the personal exemption eliminated). What this means is that some filers will not want to itemize deductions, which is the way to deduct charitable gifts from income on the tax return. This could affect the amount that donors choose to give to charity.
On the positive side, the adjusted gross income limit for deducting gifts was raised from 50% to 60%, so a greater amount can be deducted each year for those who do itemize. There are ways to work around these changes in the tax law, such as ‘bunching’ gifts and itemizing every other year, but you should consult with your attorney, tax advisor and financial planner about your unique situation.
If you have specific questions, please contact us at Shoup Legal, www.shouplegal.com.