New Tax Law Changes Could Impact Your Giving Plan
“With the tax law changes, it will be beneficial to donate now at the end of this year, rather than next year, due to the possible new tax deduction law coming in 2018.” – RITES Accountant
You may have heard that President Trump’s and the Republican party’s new tax bill will affect us in different ways. At least one of those changes could cause a widespread ripple effect – the itemized deduction amount. This shift could hit nonprofits hard, and may not benefit donors as much, either.
According to nonprofit Rhode Island Tutorial & Educational Services (RITES)’ accountant, “The new law will double the standard deductions.” This means the total of your interest, taxes and donations would need to exceed $24,000 in order for it to be tax-deductible. Currently, that amount is about $12,000. This would mean you would have to donate twice as much to be able to claim this as a deduction on your tax return.
As this report from NBC News suggests, nonprofits that rely on generous donations from private citizens could feel the pinch if donors change their giving plans. This isn’t just true of the big, recognizable nonprofits like the Salvation Army – it could impact all, from the largest to the smallest. In addition, donors should consider giving now in order to claim their donations as a deduction – a gift of a tax break to oneself – before any changes come in the new year.
In this season of giving (and getting), give yourself the gift of a tax break before it becomes much harder to reach that giving goal by making your charitable donations now, before December 31st (and that lower tax-deductible dollar amount) comes and goes.