Between now and the end of the year, many people will give to charitable organizations, but the tax benefit of those contributions could be impacted by the recently passed Tax Cuts and Jobs Act.
CPA Scott Adair of the New York State Society of CPA’s discussed the tax implications Monday during News 8 at Sunrise.
Adair said your donations should go to a not-for-profit organization that has a charitable status, like a religious organization, some of the human service-type organizations, education, and hospitals as well.
“There’s always the cash option,” he said. “That’s very popular this time of year, but there’s the ability to donate securities such as stocks or bonds, and/or anything else, like food and/or clothing, from that perspective.” You can also deduct mileage to and from a charitable organization at the rate of 14 cents per mile.
For those making donations, the Tax Cuts and Jobs Act will factor into how those tax deductions are considered. “We’ve changed the amount of the standard deduction allowed to individuals,” Adair explained. “You need to itemize first, but you also need to pay attention to the limits that have gone up too. Like, for a single individual this year, the standard deduction is $13,000. That’s up about $7,000 from where it was last year this time.”
When it comes to charitable deductions Adair said, “Bundle them as much as you can. Make sure they’re in the 2018 year, versus spreading them out over the subsequent year. You certainly want to make sure you get the most ‘bang for your buck’ in regard to a charitable donation.”
Adair said older people have an important consideration as well when it comes to the Tax Cuts and Jobs Act. “There’s been some technical changes regarding required minimum distributions for IRA’s. I’d suggest anyone 70-1/2 and over take a look at those. They are permanent now, based on the new tax code. Certainly be talking with your CPA about that, and many other things as far as the tax law changes that have gone into effect this year.”
For more “Smart Money” advice, visit the New York State Society of CPA’s website at nysscpa.org/getmoneysmart.