5 Things to Know this Charitable Giving Season
Tags: Tax Reform, Bunching, complex assets, global, local, #GivingTuesday
This time of year is often known for the changing colors of the leaves, preparations for family gatherings, and the beginning of the holiday season. More importantly, it’s also the time for many Americans to make their charitable gifts before the end of the year. If you’re considering making some gifts this season, here are some helpful things to keep in mind.
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Tax Reform
The Tax Cuts and Jobs Act brought some notable changes to charitable giving. While most Americans give out of their own generosity, not for tax purposes, every donor should be aware of some changes. Most Americans make gifts to U.S. public charities such as their church, local food bank, arts institution, large national charities, or donor advised funds. Gifts to these charities are now deductible up to 60% AGI (up from 50%).
Since the standard deduction has been raised to $12,000 for individuals and $24,000 for couples, many donors will likely opt not itemize their deductions this year. If the combined deductions will not exceed these amounts, donors will most likely consider taking the standard deduction this year. Keep in mind that your favorite charities will still need your support. |
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Bunching
Bunching is a term that is increasingly receiving more attention due to tax reform and the raising of the standard deductions. Bunching refers to when a donor contributes multiple years worth of giving to a charity, or a vehicle such as a donor advised fund (DAF), to exceed the standard deduction. Using a DAF for bunching means the donor can then recommend grants from their fund to their favorite charities whenever they want and whenever is best for the charity. |
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Complex Assets
Donating appreciated property can be a great way to support your favorite charity, no matter what time of year or no matter your income. By donating such assets directly, as opposed to selling and donating the proceeds, this may increase the amount donated since there are no taxes applied. Speak with your advisor to determine which assets could be great to donate as not all assets are created equal! |
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Global is Local
Giving to charities outside of the U.S. is complicated but luckily organizations like CAF America specialize in cross-border giving and make it easy for Americans to support charitable causes in nearly any country around the world. While giving abroad is easier than ever for American donors, it’s important to know that intermediary organizations, which allow for you to receive a U.S. tax deduction while still supporting a foreign charity, have to conduct significant behind-the-scenes to give internationally. |
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#GivingTuesday
The Tuesday after Cyber Monday is called Giving Tuesday. Started in 2012 in the U.S., it has now spread across the world and encourages people to give to charity on the same day. Consider making a donation on Giving Tuesday as your favorite charity will likely be running a campaign and there are often options for matching donations, doubling the impact of your gift. |
