With the passing of the Tax Cuts and Jobs Act, many charities are concerned that donations may drop this year. But for people who want to donate to their favorite charity, it becomes important to understand what giving means for one’s specific tax situation.
CNBC highlights some key components and outlines “what the new tax law means for your charitable giving.”
The report states: “While taxes might not have been at the forefront when providing aid to others, the tax deduction for charitable contributions has typically helped shave money off your tax bill if you itemize instead of taking the standard deduction.”
“But under the new Tax Cuts and Jobs Act, that threshold is tougher to clear. Although the deduction for donations is unchanged, you’ll still need to itemize to claim it, and that’s a much higher bar with the nearly doubled standard deduction.”
The big question for individuals surrounds taking itemized vs. standardized deductions.
According to NPR: “Charities and nonprofits nationwide are concerned about how these tax law changes will impact their budgets and are starting to look for ways to offset losses. Some say they knew changes would be inevitable, but they’re still unsure just how great of an impact to expect.”
“Rick Cohen, with the National Council of Nonprofits in Washington, D.C., estimates that charities and nonprofits such as churches, will see big drops in donations in the coming year. The drop in charitable giving could be as much as $20 billion nationwide because more people will take the standard deduction as opposed to itemizing.”
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