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Charitable Giving Under 2018 Tax Reform

Charitable Giving Under 2018 Tax Reform

Are you interested in maximizing the tax benefit of giving to the church?

April 15 may be months away, but now is the time to do your planning. The U.S. tax code encourages charitable giving in several ways and it makes sense to utilize these if possible.

On December 22, 2017 the President signed legislation known as “The Tax Cuts and Job Acts.” This legislation made a number of changes to the federal tax code that had an impact on both corporate and individual taxes. This legislation was sweeping in its breadth. There were changes to tax brackets, exemptions, and itemized deductions.

Whether or not we have already seen the impact, we will all feel the effects when we file our 2018 return.

So what does that have to do with giving to my church?

For many of you, these tax changes will have no impact on your giving. However, if you have itemized your deductions in the past, you should be aware of the changes made to this portion of the law and how they might affect you. We do not want to give tax advice. Nor do we want to tell you how to structure your charitable giving. However, if the following are true, you may have an opportunity to save some money on your taxes:

  • You have given assets to a charitable organization in 2018 (including the church)
  • You have typically itemized your deductions rather than using the standard deduction on your income tax return
  • The sum of all deductions (charitable giving, state and local taxes, property taxes, mortgage interest, medical expenses, etc.) could be in the range of $10,000 to $40,000

Bunching Your Contributions

If all of those statements are true for you in 2018, you may be interested in a new strategy known as “bunching.” The term “bunching” appeared on the financial scene early this year and refers to the potential combination of multiple years’ worth of donations in a single year to maximize the tax benefits. The total of the gifts can be the same over two or three years, but the giving is “bunched” into one year. This is sometimes done through a donor-advised fund.

If this concept is intriguing, the following charts may help explain.


Double-up on tax-deductible contributions in alternating years to achieve the larger itemized deduction in those years.

This strategy is not for everyone as our personal situations vary widely. Christ Community appreciates every single gift and desires to be sensitive to everyone.

If you think a donor-advised fund might make sense for you or you are interested in learning about other strategies to maximize your charitable giving, consult a qualified financial advisor.

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