Are you ready for the New Year? Well get ready for the Trump administration’s new tax plan.
While some parts of the bill are sure to increase the amount taxpayers can write off, some fear it may not increase the benefit of making a charitable donation.
Typically if you qualified for writing off more than the standard deductions on your tax returns, you could itemize your expenses. But starting January 1st the standard deduction is going up and some fear the incentive to donate may go down.
Think of the standardized deduction as a set list of things you can write off and itemized is where you list your deductions.
Here’s the issue, most people who donate to charities like the Salvation Army itemize their deductions.
Typically itemizing can allow a taxpayer to lower their taxable income more than the standard deduction. However, next year the standard deduction is going way up - to $12,000 for a single individual and $24,000 for a married couple.
Some fear may be end up removing the incentive to donate to charity.
Always consult with your account before making any important tax decisions.
In the case of charitable organizations, they may have to rely on people giving because they want to give, rather than because they’ll be getting a tax deduction.
