When Congress passed the new tax laws for 2018, one of the biggest changes was the increase in the standard deduction. This increase meant that significantly less Americans would itemize deductions. Many commentators were worried that this change would lead to a decrease in charitable giving. The law raised the after-tax costs of donating by 7%, according to The Urban-Brookings Tax Policy Center.
As it turns out, this change did lead to a decrease in charitable giving last year. According to Investment News, overall giving among individuals — the largest source of charitable contributions — fell by 3.8% on an inflation-adjusted basis in 2018.
As we begin to approach the end of the year, we will all be bombarded with linking taxes and giving. Despite their relationship, our encouragement to you this year is to apply a simple adage to your giving: give to give.
Giving is an act of service and generosity meant to come from the heart. The tax benefit, or lack thereof, is a moot point when giving is done for the right reasons. Of course, if you do give, we will happily help you leverage your giving in the most tax-efficient way possible, but it needs to start with a generous, willful attitude that is in line with your financial values.
How can we help you ‘give to give’ this year?