5 Ways to Make the Most of Your Charitable Giving Post-Tax Reform

We need to be continually aware of the impact we have on our society and the strategic options for our contributions.

What to do about giving?

Post-tax reform, the higher standard deduction may deter some charitable givers from donating because the tax benefit will not be available.

The current standard deduction for 2017 for joint filers is $12,700.  If the filer’s deductions total over this amount, one would itemize and include their charitable contributions as a deduction.

Starting in 2018, this standard deduction for joint filers is $24,000, so the threshold for itemizing deductions is much higher.

There are different solutions available to us philanthropists given this change.

1. Combine donation budget of two years into a single year.

A $10,000-dollar annual budget for charitable causes is more efficient if given all in one year vs. two. The two-year gift of $20,000 will offer a greater impact on filer’s tax return.

2. Investigate donor-advised funds.

These funds allow a donor to combine gifts and then designate not only the recipient but also the timing of the gift.

3. For those who are over 70 ½ years of age, the minimum distribution can be sent directly to charities.

The advantage here is avoiding the taxable income on the distribution.

4. Consider donating an appreciated asset such as real estate or securities to a charity.

The charity will receive the gift at the higher basis and the giver avoids tax from a sale and enjoys the donation deduction.

5. Create a charitable remainder annuity trust that provides current sheltered income stream now and a charitable component that shelters this income.

A win-win for sure.

Women, who on average hold over 50% of the wealth in America and who donate 3.5% of their income annually, need to be continually aware of the impact they have on our society and the strategic options for their contributions. My favorite wealth advisor and philanthropist is RJ Kelly of Wealth Legacy Group. He can be reached at rj@wealthlegacygroup.com.