The New Tax Law and Your Charitable Donations

In the middle of December, Congress passed the Tax Cuts and Jobs Act of 2017, the first new tax bill in three decades. With the bill’s passage came confusion about how it could affect charitable donations.

Here are some of the highlights and what the new tax law may mean to you as you consider gifts to your favorite charities.*

  • The standard deduction is $12,000 per person ($24,000 for married couple). This can include your mortgage interest, medical bills, etc.
  • State and additional tax deductions (example: state income taxes or property taxes) deduction is capped at $10,000.
  • If your deductions (state taxes, mortgage interest and donations to your house of worship and charities) total less than $22,000 (or $34,000 for a couple filing married/jointly), you can claim the standard deduction.
  • If your deductions total more than $22,000 (or $34,000), you can itemize your charitable deductions and receive tax benefits.
  • Donors making larger cash gifts may see some benefit because the bill increases the annual Adjusted Gross Income limitation of deductibility from 50% to 60%.
  • There were no changes to tax benefits of making an IRA gift. Donors may still make tax-free gifts of up to $100,000 per year from the IRA that will qualify as part of the mandatory withdrawal.
  • There were no changes to tax treatment of charitable remainder trusts, charitable lead trusts or gift annuities.

This doesn’t constitute tax advice. Please check with your tax expert or financial adviser to determine what is best for you.

No matter how you choose to account for your charitable donations, The Salvation Army thanks you for your support. Your gifts help us serve more than 1.4 million men, women and children every year through our programs addressing homelessness, hunger, addiction, poverty, hopelessness, violence, human trafficking and more.

For more information on how to make a gift to The Salvation Army, contact your gift advisor or call 773.205.3515.

*Information garnered from the Sharpe Group’s The Impact of the “Tax Cuts and Jobs Act of 2017” on Charitable Giving.

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