We will not know for certain until the final vote, but it appears we may have only a few weeks remaining to get in front of expiring tax provisions. Both the Senate and the House version of tax reform include an increase in the standard deduction, while eliminating many other deductions. That means in the future, fewer people will benefit from itemizing their deductions, such as charitable donations.
Below we offer a few key charitable strategies to consider before the close of 2017:
- If you have made a multi-year pledge, pool the pledges made toward upcoming years and give now.
- Ask a charity if you can pre-pay for annual subscriptions or memberships in advance.
- Establish a Donor Advised Fund and contribute as much as possible.
- In the future, it may make sense to “bunch your donations”, e.g. make your charitable gifts every other year in order to increase the amount and get them over the standard deduction threshold.
And in closing, here is a few ideas for family gifts that include deductions. Contribute to an IRA for your adult children who have earned income, but do not yet have available assets to contribute to retirement. Contribute to the education foundations where your children or grandchildren attend school in their names. Invite family members to make a joint giving decision, complete with a family visit to the charity you wish to support.