Impact of New Tax Laws on Charitable Planning

The Tax Cuts and Jobs Act brings changes to the charitable giving landscape. Fewer taxpayers will be subject to estate and gift tax because the estate and gift tax exemption was essentially doubled from $5.49 million per person to an estimated $11.2 million. Married couples filing jointly will have a lifetime estate and gift tax exemption of approximately $22.4 million.

Additionally, the new tax law almost doubles the standard deduction to $12,000 for singles and $24,000 for joint filers and, at the same time, caps or eliminates other deductions. Accordingly, it will no longer make sense for as many taxpayers to itemize.

One favorable change to note is that if you are able to itemize, your deduction for cash gifts increases to 60% of adjusted gross income up from 50%. You still have up to six years to use your charitable deductions. The change in the law will encourage donors to make larger gifts to increase their ability to itemize deductions.

We break down gift planning strategies under the new tax laws for your advantage. Learn more in our exclusive deep dive where we have details about bundling, giving non-cash assets, giving appreciated securities, and giving retirement assets.