According to the IRS, more than 36 million people offset their 2015 tax bills by taking charitable-giving deductions. The new Tax Cut and Jobs Act passed by congress and signed into law in December increases the standard deduction that taxpayers can claim from $6,350 for single filers and $12,700 for those filing jointly to $12,000 and $24,000 respectively. Many feel that increase may lead to fewer taxpayers itemizing and a potential drop in charitable giving. But there is a way for charitable-minded individuals to continue to make gifts and get the tax breaks they’ve come to enjoy. It’s what accountants call “Bunching.”
Investment savvy individuals are taking note of the skyrocketing prices of cryptocurrency like Bitcoin over the past several months. Many may still not know much about this virtual asset or how it works, but several who have it are calling RenPSG to open Donor-Advised Funds with it and alleviating some of their tax burdens.
Rarely does a week pass without some shakeup in Washington D.C. making the headlines. Most recently, the debate over tax reform has taken center stage and on this Giving Tuesday, it is a pertinent time to examine how the proposed changes are sure to influence charitable giving practices. Investors across the country are taking note and have been making serious moves to benefit from the existing tax laws before any changes go into effect.
Study after study has shown that charitable giving trends ramp up in the fourth quarter. Bolstered by holiday spirit and the need to make gifts to avoid taxes, December is, by far, the month when individuals feel most charitable. But what about the rest of the year? While nonprofit organizations are getting flooded with donations in November and December, charitable giving tends to taper off considerably after January 1st.
According to FEMA, there have been 105 declared natural disasters in the United States this year. From the flooding in Arkansas, Missouri and parts of Illinois, to the wildfires in California and the Pacific Northwest, to the most recent devastation experienced in Houston, Florida, the Virgin Islands and Puerto Rico caused by hurricanes Harvey, Irma and Maria, thousands of people are now homeless and billions of dollars and many months will be needed to complete a full recovery.
Our team loves to share great reads and yesterday a piece by Ben Steverman on Bloomberg.com was circulated. Be sure to take a few minutes to read the article but the overall premise he makes is to get your deductions this year because next year’s deductions may be less valuable. Of course, we were most interested in the portion of the article on charitable giving.
With Labor Day weekend behind us, we say good-bye to summer and gear up for our favorite time of year; giving season.