Benefit yourself by accelerating charitable donations! 

If you plan to itemize for 2017, you may wish to consider making a gift this calendar year to realize the full tax benefit. In addition, it may make sense for you to accelerate some charitable contributions planned for 2018 into 2017 to get a larger income tax charitable deduction this year.

Why?

There are at least two reasons to consider accelerating 2018 charitable contributions into the last few weeks of this year.

First, for many taxpayers, the income tax rates for 2018 will be less to some degree than for 2017; the lower the marginal tax rate, the less the benefit from a charitable contribution deduction.

Second, the legislation nearly doubles the current standard deduction.  This means a charitable contribution could have much greater tax benefits in 2017 for those who benefit from itemized deductions this year but who will be able to claim the standard deduction next year. 

What can I do to take advantage of tax savings in 2017?

  • Consider claiming larger itemized tax deductions for charitable gifts on your 2017 tax returns.  
  • Pay your state and local taxes in 2017, not 2018.
    • You will save federal income tax by paying your state and local taxes in 2017 rather than 2018.
  • Consider prepaying your real estate taxes in 2017.
  • Make your charitable gifts in 2017, not 2018.
    • If you made a multi-year pledge, pay the amounts scheduled for future years in the year 2017. 
  • Make charitable gifts from your IRA in 2017 and beyond.
    • There will be no changes to the popular law that permits individuals over age 70 ½ to make tax-free charitable gifts from their IRAs.  This will benefit many more taxpayers in 2018 and beyond if the standard deduction is increased.
  • The stock market is at an all-time high, so make a gift of appreciated stock.
    • You receive an income tax charitable deduction for the current value if you itemize and you eliminate capital gains tax on the property’s increased value. 

Every individual’s tax situation is unique.  We suggest you consult your own personal tax advisor.