Home > Archive > Proposed Changes to Tax Code May Affect Deductions

If you’ve been watching and reading the news, you know that there are many proposed changes coming, including to our tax code. I follow them with an eye towards how those changes may affect charitable giving. If you are a generous person and personally, or professionally, are involved with tax planning relating to charitable gifting, you may wish to make some moves this year that will help your plan.

Do you itemize your deductions? If so, the proposed increase to the standard minimum deduction may decrease or eliminate some the benefit you receive by itemizing because the minimum deduction is proposed to increase, possibly in 2017. If this happens, the benefit from your charitable giving, combined with mortgage interest and property taxes, may not be as high, or perhaps only slightly higher than the standard minimum deduction. So, what can you do?

You can make larger charitable gifts this year. At the Community Foundation, we’ve heard from donors who are making more significant gifts this year because we already know the benefit from our current tax code. Community Foundation fundholders with donor-advised funds can gift now before the income tax rates decrease and the minimum deduction increases. Because they have donor-advised funds, they can then distribute their charitable gifts in 2017 and even afterward. They will be able to take advantage of the larger charitable tax deduction this year and take the standard minimum deduction in future years. If you don’t pay mortgage interest anymore, this may be a GREAT benefit to you.

Personally, I’m planning to make an extra gift to my donor-advised fund this year as well as paying my 2017 property taxes this December. I have mortgage interest, but I think the standard minimum deduction will well exceed the amount I pay for that. If you believe that this would benefit you, please check with your tax advisor and give us a call. We can set up a new donor-advised fund almost instantly, and you can gift cash or stock. Gifts of stock will provide you with greater savings by avoiding the capital gains tax.

Of course, no changes have been adopted yet so you may wish to check your crystal ball. Is yours working? If you can see what will happen next year, please give me a call. It would be nice to know for certain the changes that will be adopted.

If you would like more information about the Community Foundation and our work in the community, or if you would like to join us in our work, I would love to hear from you.

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