Under the new tax bill signed by President Trump on Dec. 22, 2017, many itemized deductions were greatly reduced or completely eliminated. The deduction for charitable contributions is still intact, and the limitation increased to 60 percent of AGI, but with the loss of deductions and the increased standard deduction, many taxpayers will no longer itemize. That could mean a significant decrease in charitable giving. Remember that donating to charity is not only about the tax deduction, it’s also about helping a cause. That being said, there are still ways to donate and receive the tax benefit. For those with combined mortgage interest, donations, and property taxes (capped at $10,000) of at least $24,000 ($12,000 for singles), itemizing deductions will continue. For you, the charitable contributions will be fully deductible (up to 60 percent of AGI, or 30 percent for appreciated property). For others, consider “bunching” your contributions so that you are basically making two years’ worth of donations within the same calendar year. By doing this, you may accumulate enough deductions to itemize every other year. So, for example, if you regularly give to charities in December, consider holding off your 2018 contribution until January 2019. Then make your regular contribution in December 2019. Bunching of contributions may affect the flow of donations to the charitable organizations, which could be a detriment to the organization. One way to allow the charity to still have a constant stream of income is to have contributors use donor-advised funds. A donor-advised fund is like an investment account for your favorite charity. It allows contributors to donate money and take a tax deduction in the same year. Then they pay the money to selected charities over time. The funds are invested for tax-free growth and distributed to charities at your discretion. Even though the donor does
not directly control the money once deposited, he/she tells the fund administrator how to spend it by selecting an eligible charity and the donation amount. Another great option available for those who have required minimum distributions from IRA accounts is to make a qualified charitable distribution. This option was made permanent in 2015 and enables you to roll over up to $100,000 from your retirement account to charity. The contribution is subtracted from taxable income, giving you the benefit of the contribution, even if you don’t itemize. As you can see, there are still tax advantages for charitable giving. With the proper planning, your contributions can be tax-deductible. Either way, giving to charity makes you feel good.
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AROUND THE FIRM
We collected more than a hundred for local kids on Long Island.
ATTORNEY ADVERTISING. The purpose of this newsletter is to provide information about Love Law Firm, PLLC’s qualifications and experience. The information provided in this newsletter does not, and is not intended to, constitute legal advice. Any prior results described in this newsletter do not guarantee a similar outcome. Love Law Firm, PLLC’s distribution of this newsletter is not intended to create, and will not create, an attorney-client relationship with you. March 30 – Chag Sameach! April 1 – Happy Easter! April 20 – LIBF Women’s Forum Lunch (revised date) – Ask me about attending! April 25 – Building Blocks Webinar: “Employer Best Practices.” To attend, register at www.buildnotbilled.com. May 10 – Long Island Business Expo, Nassau Coliseum Let’s attend and support Long Island businesses! May 11 – LIBF Women’s Lunch – Ask me about attending!
If every business took the time to give back, our world would be a very different place. When neighbors help neighbors, there is more respect in the world, more joy, and more appreciation. It tears down walls and builds opportunity. On that note, I want to share with you the stories of three organizations run by remarkable individuals. You can find their stories on page 2. These are individuals who have inspired me, and I hope they inspire you.
Until next time, let’s get out there and do good!
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