Note: The information presented here is for educational and informational purposes only. Please consult your personal financial advisor and/or attorney on all legal, tax, or financial issues related to your charitable giving.
Since the tax law changes in the Tax Cuts and Jobs Act passed last year, there has been much discussion about how it will affect charitable giving. Some have even speculated that the changes will greatly hurt nonprofit organizations, such as PennFuture, who rely on your support. This doesn’t have to be the case.
The good news is that there are key tax code provisions which will continue to impact charitable giving in favorable ways. You can still enjoy important tax benefits while meeting your charitable goals.
How the new tax cuts affect you depends on many factors, including family size, available deductions, and income. And, of course, you need to talk with your own financial advisors. But, here is a brief overview of the key provisions of the new tax law and how it affects charitable giving this year.
- The standard deduction increases substantially and fewer people will itemize their taxes. The result? Taxpayers can still realize charitable giving goals and some donors will have even more discretionary funds available for planning.
- The amount of charitable cash contributions that can be deducted in any particular year has been increased from 50 percent of adjusted gross income to 60 percent of adjusted gross income. This is particularly helpful for donors making a large, legacy-shaping gift.
- Donor Advised Funds were not affected by the new law, which means contributions to these funds continue to be deductible when made. Donors can select the timing and amounts of gifts that are made from the fund, just as they have in the past.
- Gifts of retirement assets (including charitable distributions from an IRA for those age 70½ or over) remain particularly attractive charitable giving options. The new tax law passed in December 2017 did not change the popular gift option known as the IRA Charitable Rollover—a charitable distribution from your IRA directly to PennFuture. This is good news for IRA owners age 70½ and over who must take a required minimum distribution from their IRA and also want to support our work in 2018. You can use your IRA to make a meaningful gift now and avoid taxes on the IRA distribution. It’s easy to do.
- Instruct your IRA custodian to make a distribution directly to PennFuture. The distribution counts toward your required minimum distribution (RMD).
- Although there is no tax deduction, the distribution is excluded from your income for federal tax purposes—no tax is due!
- Up to $100,000 of your gift qualifies for this favorable tax treatment.
- Your gift makes an immediate impact—there is no need to wait until the end of the year!
- For many of our friends, moving beyond the “basic” gift planning options makes it possible to experience even greater personal benefits. For example, there are two reasons why a gift of stock may be more advantageous than a gift of cash.
- There is no capital gains tax due on the appreciated amount.
- The full amount of the gift qualifies for an itemized tax deduction.
Please let us know how we might help you and your advisors explore charitable strategies under the new law. You can always call me directly at 717-214-7924, or email me at email@example.com
Thank you! Your continued support for PennFuture’s mission makes a lasting difference.
For gifts of stock, IRA rollovers, and planned giving, PennFuture’s legal name is “Citizen’s for Pennsylvania’s Future.” Our EIN# is 31-1607866, and mailing address is 610 N. Third St. Harrisburg, PA 17101.