Tax Reform and Charitable Giving Strategies for 2017 and 2018
The Tax Cuts and Jobs Act provides for several new lower tax rates, nearly doubles the standard deduction, and eliminates personal exemptions and almost all itemized deductions. Although the legislation maintains the current law income tax charitable deduction, it will significantly reduce the number of taxpayers who itemize and effectively eliminate the income tax charitable deduction for a vast majority of Americans.
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.
To make sure you see a tax break for this year (when you itemize deductions on your income tax returns), you must make your gift before Dec. 31. Here are a few important things to keep in mind:
A gift can be made online through Dec. 31.
If you plan to send a gift by mail, we recommend that you send your gift via the U.S. Postal Service with a postmark on or before Dec. 30 (the last day post offices are open).
If you plan to make a gift of stock or mutual funds, we recommend you initiate the transfer as soon as possible, to allow time for processing and to ensure the transfers are executed by Dec. 29 (the last business day of the year). Download stock donation instructions. If you have questions, please contact Laurie Knutson with UBS, 952-474-9460.
If you feel that you have maximized your giving for 2017, here are some things to consider for charitable giving in 2018:
- Donate appreciated stock: With the stock market at or near all-time highs, give your appreciated stocks to a nonprofit like MHIF and eliminate capital gains tax.
- Name us as a beneficiary of retirement plan assets: These assets remain taxable when distributed to a loved one but tax-free when given to a nonprofit.
- Give from your IRA (if are age 70½ or older): Regardless of whether you itemize your taxes, this gift helps you fulfill your required minimum distribution and is not considered taxable income.
- Talk With Your Tax Professional. Please consult with your tax or financial advisors to determine the best charitable giving strategies for you.
If you have any questions or are interested in making a donation, please contact the MHIF Development Team: