New tax plan will change charitable deductions

A new tax plan signed by the president takes effect this year, what it means for charitable donations

Posted: Dec 12, 2018 6:14 PM
Updated: Dec 12, 2018 6:21 PM

(ST.JOSEPH, Mo) In December of 2017, the president signed a new tax plan which doubled the standard deduction.

The objective was to give tax breaks and make filing easier, however, it's also come with some unintended consequences.

"When you're looking at charitable contributions, it's gonna impact that," Shelly Hulet, CPA, said. 

Hulet said, about 30% of taxpayers usually itemize their deductions, this year she only expects 10% to do so.

Itemized deductions have been a big incentive for taxpayers to give to charities, and the new tax plan is a concern for those organizations, who rely heavily on donations this time of year.

"I would say close to 50% of our total budget this year will come from end of year giving" Major Abe Tamayo, Salvation Army said.

Tamayo called the new tax plan an "issue", he said its hard to tell exactly what the effect will be.

"It's our first year through it, Tamayo said. "We're kinda waiting through and hoping for the best result," 

Hulet said there is a workaround for taxpayers, she advises clients bunch donations by doubling up one year, skipping the next year and repeating.

Hulet also says this new tax plan won't completely stop taxpayers from making charitable donations.

"I really believe people are going to donate whether they get a tax deduction or not," Hulet said. 

Hulet says those who receive income from IRAs can directly transfer funds to charities of their choice, lowering the taxable portion of their IRA.

Article Comments

Saint Joseph
Overcast
65° wxIcon
Hi: 71° Lo: 53°
Feels Like: 65°
Maryville
Overcast
64° wxIcon
Hi: 68° Lo: 52°
Feels Like: 64°
Savannah
Overcast
65° wxIcon
Hi: 70° Lo: 52°
Feels Like: 65°
Cameron
Overcast
64° wxIcon
Hi: 72° Lo: 52°
Feels Like: 64°
Fairfax
Broken Clouds
65° wxIcon
Hi: 68° Lo: 52°
Feels Like: 65°
We will be keeping an eye on the potential for flooding rain and strong to possible severe thunderstorms heading into our Saturday night and into Sunday.
KQTV Radar
KQTV Temperatures
KQTV Alerts

  

 

 

Community Events