With a new year just beginning, you might be starting to prepare for filing your 2018 taxes. Whether you are prepared or not, there are things you should know before filing your taxes.
Many people depend on deducting their charitable donations to reduce their tax bills. However, changes to tax law may affect your ability to use charitable donations as deductions. These changes not only impact the taxpayer, but also the charities and nonprofits around the country.
Changes to tax law have made charitable giving more difficult. The Tax Cuts and Jobs Act, which became law at the end of 2017, almost doubled the standard deduction amount.
What does this mean for you?
The new law changed the amount you can reduce your adjusted gross income (AGI) on your income tax return. This change increased to $12,000 for single/married but filing separately and $24,00 for joint filings of married couples.
What can you do?
Don’t give up on making charitable donations. There are still benefits to giving that have positive consequences to you and your finances.
Also, not all charitable donations are off the table in terms of tax deductions. According to NOLO, “this increase means that it will become more financially beneficial to simply take the standard deduction than to itemize deductions on their federal income taxes.”
If you are concerned about how these changes will affect you and your charitable deductions, consult a tax professional for more information.