Tax Planning for the New Tax Law: Part 6
Now that the standard deduction is almost doubled to $12,000 per individual or $24,000 for those who are married filing joint returns, the ability to itemize deductions has been reduced. Itemization only benefits you if your itemized deductions (charity, mortgage interest, and up to $10,000 in property taxes) exceed the standard deduction. Moreover, with the cap on property taxes and the elimination of miscellaneous itemized deductions, fewer people will be able to itemize at all. This means that fewer people will benefit from any charitable deduction.
So what should you do?
The answer is to bunch up your charitable donations every other year. The key is to get your charitable deductions high enough to exceed your standard deduction. If you double or even triple your normal charitable contributions every other year or even every third year, your deductions should be high enough to itemize.
This can be done in a variety of ways. For example, you can contact your church or synagogue or mosque and note that you will be donating or tithing every other year but each donation will be double. The same could be said for college donation, donations to Salvation Army, etc…
Remember, everything becomes a lot cheaper if you can write it off.
All content on this site is the property of Taxbot, LLC and/or Sandy Botkin. You may link to any article that you wish, or share via the social media buttons below. However, please do not copy articles or images for use on other sites without express written permission.