Aug. 28, 2023 update follows
Donations to qualified charities are generally fully deductible, and they may be the easiest deductible expense to time to your tax advantage. After all, you control exactly when and how much you give. But before you donate, it’s critical to make sure the charity you’re considering is indeed a qualified charity — that it’s eligible to receive tax-deductible contributions.
The IRS’s online search tool, Exempt Organizations (EO) Select Check, can help you more easily find out whether an organization is eligible to receive tax-deductible charitable contributions. You can access EO Select Check at http://apps.irs.gov/app/eos. Information about organizations eligible to receive deductible contributions is updated monthly.
Also, with the 2016 presidential election heating up, it’s important to remember that political donations aren’t tax-deductible.
Of course, additional rules affect your charitable deductions, so please contact us if you have questions about whether a donation you’re planning will be fully deductible. We can also provide ideas for maximizing the tax benefits of your charitable giving.
UPDATE: Aug. 28, 2023
The latest developments regarding charitable donations and tax deductions include the passage of the Tax Cuts and Jobs Act (TCJA) in 2017, which doubled the standard deduction and limited the state and local tax (SALT) deduction. These changes have had a significant impact on taxpayers’ ability to itemize their deductions, including charitable donations. Despite this, some charities have experienced an increase in donations as a result of increased awareness about the importance of giving back. Additionally, certain states have implemented their own charitable deductions to help offset the loss of the SALT deduction at the federal level. It is crucial for individuals to stay informed about any potential changes in tax laws or provisions related to charitable donations so they can make informed decisions and maximize their tax benefits.
The changes made to the tax deductions for charitable donations under the Tax Cuts and Jobs Act (TCJA) in 2017 are permanent unless new legislation is passed to amend or repeal them. The TCJA doubled the standard deduction, which has led to fewer individuals itemizing their deductions, including charitable donations. However, it’s worth noting that these changes are not specific to charitable deductions alone but affect the overall itemization of deductions for taxpayers.
The limitation on the state and local tax (SALT) deduction, which was included in the TCJA, also impacts the overall tax benefit of making charitable donations. Some states have introduced their own charitable deductions to mitigate the loss of the SALT deduction at the federal level.
It’s important to stay updated on any potential changes in tax laws or provisions related to charitable donations, as they can have an impact on individuals’ decisions to donate and the tax benefits they receive. Consulting with a Sol Schwartz & Associates tax professional or staying informed through reliable sources is advisable for individuals who are looking to make charitable donations and want to understand the tax implications involved.