Contact Us
Firm Overview
Why Legend Is Different
Client Types
Professional Biographies
Frequently & Rarely Asked Questions
Risk Spectrum
Investment Strategies
Second Opinion
Global Investment Pulse
Event Calendar
Press Center
Legend News
Clients Only
Career Opportunities
Newsletter Sign-up
Site Search
Site Map
Tell A Friend About This Website
Informational Booklets   
Phone: (412) 635-9210
  (888) 236-5960
Connect With Legend:
Subscribe to me on YouTube

Sidestepping New Limits On Charitable Donations

Some may think they are no longer allowed to deduct items like charitable donations on their income tax return, think again.


The new tax law doubled the standard deduction, slashing the number of Americans eligible to itemize deductions from 37 million to 16 million.


However, if a taxpayer is among those who will lose their ability to deduct charitable donations, there is a simple strategy for managing the new limits on charitable giving, and it enables the taxpayer to continue doing good while doing well for themselves by reducing their tax bill.


The strategy is simple: bunch a few years of donations into a single tax year instead of making them annually.


Rather than report charitable donations on their tax return every year, they would bunch two or more years of contributions into a single tax year—enough to boost the charitable total above that year’s standard deduction.


Assume one is married and they give $10,000.00 in Year 1, $6,000.00 in Year 2 and $10,000.00 in Year 3.  Their $26,000.00 total surmounts the $24,000.00 eligibility.  If they deduct the total donations of $26,000.00 in Year 3, they can take the standard deduction in Years 1 and 2 and itemize in year 3.


Instead of giving in dribs and drabs, each taxpayer will need to plan their giving strategy, but this will allow them to give as much as they used to before the limits without losing the tax benefits, if the law is not changed again.


If a taxpayer can plan to make the larger donations in a year when they expect higher income, bunching charitable donations can be even more effective in lowering their tax bill.


Please call with any questions about personal income tax situations.

©2018 Legend Financial Advisors, Inc.®. All rights reserved.