The New World of Charitable Deductions

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The New World of Charitable Deductions

Your charitable contribution deductions are still a great tax savings tool, This year, they require more planning to handle the changes from the Tax Cuts and Jobs Act (TCJA).


Typically, cash and non-cash charitable donations can be deducted on an itemized return. Unfortunately the standard deduction is increasing to $12,000 for single filers and $24,000 for married joint filers. This means that itemizing every year is less helpful for many taxpayers.

This is true because many other itemizeable deductions have been reduced by the TCJA. These include miscellaneous itemized deductions, state and local tax deductions, and home loan interest deductions.

Leverage charitable tax planning

If you want to donate and get beneficial tax treatment, you can still make it work. Here’s how:

Conduct a year-end tax forecast. Plan now to see how close the amount of all your yearly itemizeable items will come to exceeding your standard deduction threshold.

Bundle two-in-one. Consider bundling two years of charitable giving into one year. This will allow you to maximize your itemizations in one year. Then you can use the tax savings of the standard deduction in the other year to help pay for your donations.

Maximize your charitable deduction. Consider donating appreciated stock held longer than one year to take advantage of the charitable deduction. This is a better alternative than writing a check as you avoid paying capital gains and you can deduct the fair market value of the stock as a donation.

Itemized deduction rules have changed, but you can still take advantage of tax deductions from your charitable giving. You simply need to adjust your planning. Call if you’d like to discuss this or any other tax-planning strategies.