Year-End Giving for 2018
The Tax Cuts and Jobs Act legislated tax changes which may affect your charitable giving plans. The standard deduction has increased to $24,000 per couple and state and local taxes are capped at $10,000. Therefore, if you used to itemize, total deductions need to exceed $24,000 to itemize for 2018. Please find below a few tips for year-end giving:
- Be sure and review your gifts to date to ensure you have given to the causes most important to you and in the amounts you intend. Date your check on or before December 31, 2018. If mailing, the postmark also has to be dated by December 31, 2018. If donating by credit card, the charge must be made before midnight on December 31, 2018.
- Donor Advised Fund: You can set up a Donor Advised Fund to aid in simplifying and organizing your giving and help reach the $24,000 threshold for deductions. If you make several gifts to non-profit organizations annually totaling more than $10,000, hold appreciated securities, expect to have a high income tax year through a bonus or financial windfall, are selling a business or asset, or are updating your will or estate plan, a DAF may be a good fit for you. Please see our article Is A Donor Advised Fund For You? for more information.
- Give cash or stocks before the end of the year to ensure they count for 2018. When you give appreciated stock (securities that have been held longer than one year), you are unburdening yourself of future taxes so you can give more and have it “cost” less. When you sell appreciated securities, you forfeit a portion of the proceeds to taxes.
- Required Minimum Distribution: If you are 70 ½ years old, you can make a donation to United Way to satisfy the Required Minimum Distribution and avoid treating the withdrawals as taxable income. Gifts of up to $100,000 can be made and most times it is as simple as filling out a form with your plan administrator.
- Increase your 401K: If you won’t hit your maximum on contributions by year-end, consider directing extra dollars to your retirement plan during your last few pay periods. If you receive a year-end bonus, use it to build up your savings.
- Income tax withholding: After calculating your taxes for 2018, work with your accountant to see if you should adjust the withholding on your employers W-2 form.
- Flexible spending accounts: If you contribute to a Flexible Spending Account, make sure you have used all the money in the account. Now might be the time to have that medical procedure you have been delaying.
Please contact Eve Powell, firstname.lastname@example.org, on how you can make an impactful charitable gift to United Way of Greater Atlanta.