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Nate Obringer, CFP®, RICP®
Financial Planner
Prudential Advisors
9800B McKnight Road, Suite 223
Pittsburgh, PA 15237
Phone: 412-318-4129
Fax: 877-840-2322
Email: nate.obringer@prudential.com
July/August 2018
Charitable Benefits
If you still itemize your taxes after the passage of the Tax Cuts and Jobs Act of 2017, donating to qualified charities just became more financially attractive for you.
More of Your Income
The new tax law allows taxpayers to deduct cash donations to qualified charitable organizations of up to 60% of their adjusted gross income annually. They can also carry forward any amount that exceeds the 60% limit for up to the five succeeding years. This, like most individual tax changes in the new law, will expire after 2025.The Internal Revenue Service also allows anyone operating a vehicle for charitable purposes to deduct 14 cents per mile, the same as in 2017.
Give or Not?
Some observers predict a drop in charitable giving because fewer people will itemize deductions on their tax returns. This prediction is based on the belief that Americans give to charities primarily to reduce their own tax bills.The estate tax exemption doubled to $22.36 million per couple and $11.18 million per individual, indexed to inflation, but the standard deduction increased to $12,000 per single tax filer and $24,000 per couple filing jointly, which some observers expect will limit the number of people who itemize. We’ll find out if charitable donors are more altruistic than this prediction once charities add up their donations from 2018.
Giving Regularly
If you are among those taxpayers who will continue to itemize on your tax return, you can make gifts of up to $15,000 per individual per donor annually without having to subtract the amount from your federal estate tax exemption. This exclusion can add up, depending on how many gifts you make annually.For example, both you and your spouse might make $15,000 gifts to each of your three children. That’s $90,000. And let’s say you both also give the same gifts to three grandchildren. That’s another $90,000 for a grand total of $180,000 in one year. This can add up over time and become an effective way to transfer your assets to loved ones tax efficiently.
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Nate Obringer is a Financial Planner with, and offers securities and investment advisory services through LPL Enterprise (LPLE), a Registered Investment Advisor, Member FINRA/SIPC, and an affiliate of LPL Financial.
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