“Mommy, please don’t donate us to the VoA! We promise we’ll be good!” (Spoiler alert: They won’t.)
I got two calls in about ten minutes asking about charitable donations for 2019. Both clients had essentially the same question: Do they even count anymore?
Well, that depends. Charitable contributions are still deductible, but the threshold you have to meet before it makes a difference on your tax return is much higher than it used to be.
For a couple filing jointly the standard deduction for 2019 is $24,400. Compare that to 2017, when the standard deduction for a married couple was only $12,700. For most of my clients hitting that $12,700 mark wasn’t hard with mortgage interest, real estate and payroll taxes, so charitable contributions helped reduce their taxable income. But now with the higher standard deduction and a cap of $10,000 on those deductible taxes very few people are itemizing, even the most generous among us.
So what can we do? I would never discourage any one from donating to a charity with a mission they support. But chances are it won’t reduce your taxable income.
However, if you are 70.5 years old you can make a “Qualified Charitable Distribution” from your IRA. Instead of coming to you the funds go directly to the charity of your choice and reduce your taxable income dollar for dollar. This can be a great solution for those of you facing RMDs that you are not looking forward to paying tax on. Let me know if you are interested in learning more!
And I am man enough to admit that the primary reason for this post was to sneak in the picture of Melody’s kittens!
boo ya