December 7, 2018

The end of the year is a time of great holiday celebration, but it’s also when forward-thinking minds begin considering tax season and how to best close out the year financially. 

Avoiding unnecessary capital gains tax and ensuring your charitable deductions are where you want them are two vital parts of preparing for January.

Resources for the Savvy Taxpayer 

World Challenge receives regular alerts by The Giving Crowd about ways we can help you plan for wise and informed giving. Websites like Charity Navigator and The Balance Small Business offer easy-to-understand explanations on how tax changes will affect charitable tax deductions and how to save income from becoming taxable while also being generous. 

The CliffsNotes version, though, is as follows:

  1. Lower tax rates for you will mean extra income for charitable giving.
  2. Higher standard deductions equal more incentive to give so you can itemize deductions.
  3. Donating appreciated property—especially in this growing economy—will help you qualify for charitable deductions and avoid capital gains tax. 
  4. Naming a nonprofit charity like World Challenge as a beneficiary of your retirement accounts will mean your gift will pass on tax-free.
  5. The adjusted gross income (AGI) limitation has been increased from 50% to 60% for donations, so higher net worth donors may want to consider increasing cash donations. 
  6. If you’re a donor in your golden years, giving from your IRA will help you fulfill your required minimum distribution and ensure that it’s not taxable. 

In addition, World Challenge has a free estate planning tool available online to help you make sure your will or estate plan is up to date with the most recent tax reforms and plan for legacy giving. 

Closing Out the Year Well 

While some articles have made ominous noises about what this year’s tax reforms could spell for charities, studies are showing that people are supporting charities more generously than ever. 

In fact, Giving USA says that 2017 was a record year for Americans in terms of charitable donations, and organizations like Winspire predict that giving will increase in 2018. 

As the holidays approach, we at World Challenge would ask you to prayerfully consider how you will close out 2018 and prepare for the new year.