Giving Compass’ Take:
· Reporting for MarketWatch, Alessandra Malito discusses the Tax Cuts and Jobs Act implemented earlier this year and how it will affect charitable giving.
· The article mentions that the strong economy will help boost charitable giving this year. How will the current climate affect your donations in 2018?
The Tax Cuts and Jobs Act, which took effect earlier this year, doubled the standard deduction. The standard deduction rose from $6,350 in 2017 to $12,000 for single individuals and $12,700 to $24,000 for those married filing jointly.
Nonprofit organizations were concerned they’d lose out on major donations this year as a result of the change, said Patrick Rooney, an economist and philanthropy professor. Households would likely donate an estimated $13.1 billion less per year, a decline of 4.6%, according to his research.
Taxpayers do adjust how much they donate in any year based in part on whether their donations are tax-deductible, or whether their tax liabilities will be affected, according to a separate Philanthropy Outlook report produced by the Indiana University Lilly Family School of Philanthropy.
People may double up charitable donations every other year to exceed the standard deduction, experts said. Because the standard deduction has doubled, people may decide to donate to charities every other year so they exceed their deduction.
Read the full article about the new tax law and charity by Alessandra Malito at MarketWatch.
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