Taxpayers have just a few weeks left to make their charitable contributions for the 2018 tax year. In order to qualify for the tax deduction, the deduction must be made by the end of the year and must be made to a qualified organization. Special records must be kept as well depending on the type and amount of the contribution.
The new Standard Deduction of $12,000 for Single filers and $24,000 for Married filers may make it more difficult for taxpayers to receive a tax deduction for their charitable contributions. One strategy to make donations and still receive a tax benefit is to group your contributions in certain years and limiting your contributions in other years. For example, rather than contributing $5,000 each year, you can save and contribute $10,000 every other year. The larger charitable contribution could be just enough to exceed the new Standard Deduction so you can then benefit from the potential deduction.
As we approach the end of the year, if you still haven’t made all of your contributions yet, you may want to review your current tax situation to determine if it is more beneficial to make the donation now or next month to push the deduction into the 2019 tax year.