The recent tax law change enacted last year will affect every 2018 taxpayer. Those who contribute to charitable causes may be surprised to learn that they will be among those most affected. This is because many deductions may be limited under the new law. Specifically, the standard deduction has been expanded such that many more tax payers will be using it. This will result in not being able to deduct charitable contributions if the standard deduction is being used in the same year a gift is made. For such taxpayers, the loss of tax benefits could affect their giving. For those not affected by the use of the standard deduction, those who might be in high income tax brackets, charitable giving tax benefits may be enhanced. This is because, although other previously deductible expenses are now limited, charitable contributions were not so affected. For both categories of tax payers, gift planning takes on a more critical role if we are to be tax smart in our giving. I have found that tax benefits alone do not necessarily motive one to give, but that they can help a donor be more productive in their giving.
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