The first question to ask is, "With the increase in the standard deduction, will I still benefit by itemizing my deductions?" If not, you may, in effect, lose your charitable contribution deduction.
There are several ways to continue donating to your favorite charitable organizations and still get a tax deduction.
Charitable contributions are one of the few deductions enhanced under the Act, which increased the AGI limitation on cash contributions from 50% to 60%. That means that you can contribute and take a deduction for up to 60% of your adjusted gross income.
High Income Individuals
Under the old law, charitable deductions were subject to limitations. For those with high income, these limitations reduced their deductions by 3% for every dollar of taxable income over certain thresholds and ultimately up to 80% of their itemized deductions. The new tax law repeals the limitations! Those high-income households can now donate and get the full deduction, no matter how much you earn.
If you are over 70-1/2 years old, you should make your charitable contributions directly from your IRA account. You can contribute up for $100,000 per year using a Qualified Charitable Donation (or QCD).
If you are younger, there are other ways to make your charitable contributions deductible such as through a Donor-Advised Fund. Other strategies involve bunching your giving into years.
Have concerns or need advice to maximize your charitable deductions? Contact our Tax Team for a review of your Itemized Deductions and Charitable Giving strategy.