November 13, 2018 10:51:05 AM
Thoughts on giving after new tax law
The New Year is coming, and it is time to think of taxes and how we can lessen the amount that we will be paying in April of next year. The Tax Cuts and Job Act (TCJA) that went into effect in December of 2017 was designed to lower our overall tax burden, but it also eliminated the tax benefits for most charitable donations.
The TCJA nearly doubled the standard deduction for individuals and couples and it may not make sense for people who have itemized in the past to do so this year. One group of people, however, still have an incentive to make donations to a charitable group. If you are 70 ½ years of age or older and must take required minimum distributions (RMD) from an IRA each year, you can reduce your tax burden by donating all or a portion of your RMD directly from your IRA to a charitable organization. (The contribution must come directly from your IRA so you will have to ask your financial advisor to carry this out.) Since money coming to you from your IRA is taxable, having the RMD go directly to the charitable organization will lower your taxable income and likely lower the amount of taxes you will owe at the end of the year.
As the director of a local non-profit organization, I've always been amazed at how generous the citizens of Starkville are and don't expect to see a large decrease in donations because of the new tax laws. We care about each other and support organizations helping the least advantaged among us. However, I am concerned whenever there is an institutional change that may affect our continued service to those in need of better housing. Please remember to continue to support the organizations that touch your heart with your prayers, your time, and your finances.