Tax Reform Doesn’t Mean The Benefits Of Charitable Giving Have Ended

Charitable giving has become harder under the Tax Cuts and Jobs Act, but your wealthy clients can still find tax advantages in donating.  Giving by individuals fell 1.1% in 2018, a decrease of 3.4% when adjusted for inflation, according to “Giving USA 2019: The Annual Report on Philanthropy for the Year 2018,” a publication of the Giving USA Foundation and researched by the Indiana University Lilly Family School of Philanthropy.

“Tax policy changes may have created uncertainty for some donors, especially those who previously itemized but no longer will,” said Una Osili, associate dean at the Lilly School.

Bunching deductions, a charitably inclined client gives less than the new standard deduction of $24,400 in 2019 and consequently sees no tax benefit.  Instead, that client could double their annual giving in one year to get more than the standard deduction; the next year, that client would do no charitable giving and simply take the standard deduction.