Major change to the way charitable giving impacts your taxes

The international day of charitable giving is the kick off to the giving season, but there are some big changes you need to know about.

The number of people who itemize their taxes is expected to drop dramatically this year.

It’s all because of the Tax Cuts and Jobs Act that went into effect.

A local finance professional says the standard deduction has nearly doubled.

“This year the standard deduction went up to $24,000 for married filing and jointly, so that may inhibit the actual benefit for giving so there really needs to be an analysis of that whole situation,” said finance professional, Brad Ewerth.

A lot of the rules have changed so you need to determine the impact of taxes if you decide to give.

Ewerth gave an example scenario with the standard deduction now being at $24,000.

“If you give $10,000 and you have $12,000 in other deductions, your total would be $22,000.. well you get $24,000 by doing nothing so that’s what it’s going to come down too, you may give which is great but in a tax standpoint, your going to get a deduction whether you do or don’t,” said Ewerth.

If you are single the standard deduction is $12,000. Ewerth says you may or may not get a tax benefit from a charitable giving depending on certain financial factors.

“Here in our office, we really look at the tax benefits and if it’s going to apply and how to maybe use some strategies of trying to take advantage of tax code with deductions,” said Ewerth.

The new changes may have an impact on #GivingTuesday. They hope to surpass the record of $300 million donated last year.

Some tax strategies for charitable giving are bunching, donor-advised funds and required minimum distributions.

Instead of giving to charity every year, you can save your donations and give twice as much every-other year.

You can contribute cash, stock, even bitcoin and personal items like jewelry. It is invested and grows tax-free until you choose to donate to a qualified charity.

Talk to your financial professional to determine how much you need to withdraw and your deadlines.