Charitable Giving Under the Tax Cuts and Jobs Act of 2017

By John E. Kent, Jr., CPA, Director

Charitable Giving Under the Tax Cuts and Jobs Act of 2017

By John Kent, CPA | Business Assurance & Advisory Services Partner | Not-for-Profit Industry Team

Since the passage of the Tax Cuts and Jobs Act (TCJA), many nonprofit organizations have raised concerns regarding the increased standard deduction and the impact that it will have on taxpayer giving since certain taxpayers will no longer itemize deductions. In fact, some forecasters are predicting a 5% decrease in charitable giving, and they also predict that charitable giving will likely come from fewer and wealthier donors. However, there is some good news in the TCJA  and organizations should consider the following when strategizing with their donor base.

  • The 50% limitation for cash contributions to public charities and certain private foundations has been increased to 60% for tax years after 2017 and before 2026.
  • For taxpayers that continue to itemize, the deduction limitation is suspended for tax years after 2017 and before 2026. Under pre-TCJA law, higher-income taxpayers who itemized their deductions were subject to a limitation if their adjusted income exceed certain levels.
  • While overall tax rates will be lower and make the charitable contribution less valuable, the tax rates for individuals that fall in certain bubble ranges (single, over $200,000 but less than $416,000) (married filing joint, over $400,000 but less than $416,000) will have higher tax rates than before 2018 and the charitable contribution will be more valuable than in past years.

Please contact your Keiter advisor regarding how the changes may affect you and possible planning opportunities to reap some tax benefits from your charitable contributions. Email | Phone: 804.747.0000.

Additional Resources:

Charitable Contributions: Changes with the New Tax Law

Excise Tax Changes Impact Tax Exempt Organizations

New Rule for Tax-Exempt Not-For-Profit Organizations with Unrelated Business Taxable Income

Tax Cuts and Jobs Act Resource Guide

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About the Author

John E. Kent, Jr.

John E. Kent, Jr., CPA, Director

John is the Quality Control Director at Keiter and has more than 30 years of experience in public accounting providing auditing and business consulting services to clients in the retail, manufacturing, construction, and not-for-profit industries. During his tenure, he specialized in benefit plan audits, mergers and acquisitions, business planning, and financing. His experience includes designing and implementing cost accounting and inventory control systems for multi-industry companies, conducting LIFO inventories, conducting quality of earnings reviews, and assisting clients with adopting new accounting standards. Read more of John’s insights on our blog.

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The information contained within this article is provided for informational purposes only and is current as of the date published. Online readers are advised not to act upon this information without seeking the service of a professional accountant, as this article is not a substitute for obtaining accounting, tax, or financial advice from a professional accountant.


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