advertisement

5 simple things to do before Jan. 1 to make your donations go further

Most charities are bracing for a significant decrease in giving next year because of the new tax law. Some experts estimate people will drop their giving by $13 billion to $20 billion in 2018 because charitable giving will no longer be tax-deductible for roughly 30 million households.

Under the new law, the standard deduction will nearly double from $12,700 to $24,000 for married couples filing jointly and from $6,350 for individual filers to $12,000. That will simplify tax season for the 30 million taxpayers who won't have to track down all their giving for the year when they itemize their deductions at tax time. However, they will also no longer get any extra tax benefit for their charitable gifts. That's why experts and charities expect a slowdown in giving. Many people will keep contributing to the organizations that are important to them, but without a tax incentive, they are expected to give less overall.

So here are some ideas on how to make your giving go further, despite the tax law's decreased incentives.

1. Give for next year today

If you give before the end of the year, you can do next year's giving now and still get a deduction. If you've been considering giving something extra, now's the time. Postmark your check by Dec. 30 (Dec. 31 is a Sunday) and you will be able to claim that deduction when you file your 2017 taxes.

2. Bundle your giving

A popular giving vehicle among affluent Americans is to give to a donor-advised fund. This is a charitable account that you can give to now while directing the money toward a charity later. In the meantime, the money sits in the account. By bunching two or three years' worth of giving into one year - enough to give more than the standard deduction - that money can be paid out to your favorite charities every year in the same way you always gave it. You will just get the tax benefit when you first transfer the money into the donor-advised fund.

Most charities will help donors open such accounts, and they're also available at financial institutions such as Fidelity, Charles Schwab and others. Some religiously based organizations provide donor-advised funds along with assistance to make them convenient and easy to use.

3. Give noncash gifts

Donor-advised funds also make it easy to give gifts of appreciated stock, property or other assets. With stock gifts, you can claim the full value of the stock as a gift. Giving assets that have appreciated significantly not only saves from paying taxes on the appreciated amount but allows you to "bundle" your gifts in another way.

4. Give some or all of your tax savings

The tax law gives as well as it takes away. While many taxpayers lose the tax benefit of their charitable deduction, most people will also pay less in taxes. Consider giving some or all of the savings to your favorite charities.

5. Give to charity with no strings attached

Many people give to a campaign or specific cause within a charity. Humanitarian organizations ask for gifts for goats or clean water, or to a specific disaster, such as a hurricane. Local charities might ask for a gift to a new building or to help the homeless in winter.

Specific appeals help many of us open our wallets a little wider. But giving attached to a specific cause can also limit your gift. A charity must have the money to feed the homeless, but it also needs the funds to pay the accountant. If the tax law really creates a $13 billion decline in giving, many charities are going to need all the financial flexibility they can get to survive.

So give a little extra for a goat or the local food drive. But in your giving, don't say what it's for, and trust the charity to know how best to help the people it serves.

Article Comments
Guidelines: Keep it civil and on topic; no profanity, vulgarity, slurs or personal attacks. People who harass others or joke about tragedies will be blocked. If a comment violates these standards or our terms of service, click the "flag" link in the lower-right corner of the comment box. To find our more, read our FAQ.