There is a lot that goes into tax planning. With the recent changes in the tax law and environments, charitable contribution is one area that has seen a lot of change. With the standard deduction doubling year over year, the benefit of charitable deductions has decreased.
Charitable Contribution Decline
So we are seeing people who have normally given charitable contributions year after year now clumping, or in another way, grouping their deductions. So an example of this is if I was going to give this year, maybe I’d hold off this year and group it with next year’s giving.
That way, my deductions are exceeding the standard deductions.
I’m not saying here that is good or bad, right or wrong. Really what I want you to think about here is yes there is a benefit to doing that and yes your tax deduction will go a little bit further. But think about it from the other side. We all want to be giving, we all want to be supporting. Maybe there are charities and organizations that you really love, but they are also counting on our giving throughout the year. Not just at the end of the year and if there is a season where they are not receiving it, they are going to be hurting.
So, as we are giving, as we are trying to make our dollars go a far as possible, think about the impact of where those go.
Maybe its as simple as what is going to happen in December and giving it in January so that you are doubling up a little bit at year end. Your not withholding or keeping those dollars to yourself.
So as you are reading about those strategies, really think about it from all different sides.
“Is it right for me?”
“Does it work?”
“How will it affect those organizations I love and support?”
If we can help you in any of this, please reach out! Interested in learning how this affects your future finances? Contact Financial Design Studio, Financial Advisors in Deer Park.
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