4 questions donors should ask about tax code changes

Many donors haven’t adapted their giving to align with the Tax Cuts and Jobs Act, but these questions can help them get started.

Updated March 10, 2020

Recent Fidelity Charitable research shows donors may not understand the impact of the Tax Cuts and Jobs Act on their giving. Donors should ask themselves a few questions to ensure they can keep the tax deductions they are expecting while maintaining their charitable giving.

1. Should I make changes to my giving based on the tax law?

If your itemized deductions will not exceed the new standard deduction amount, then it’s wise to proactively look at your giving to ensure you are maximizing your gifts. However, because the recommended strategies mean changing giving plans, donors need to make the decision before year-end.

Learn more about changes to the tax code

2. Should I consider “bunching?”

Bunching can act as a powerful tool for generous givers who also don’t want to miss out on the tax advantages of their gifts. Not sure if bunching is right for you? Talk to your CPA or financial advisor.

3. Would donating appreciated stock allow me to give more?

Donors concerned with having the cash to fund a bunching strategy may want to consider giving long-term appreciated stocks. This type of donation means you don’t have to use your after-tax income for giving. Even more importantly, you will minimize capital gains taxes that would be due if you sold the securities.

Learn about donating stock to charity

4. Is a donor-advised fund right for me?

Donors considering bunching charitable contributions may wonder how they can maintain their annual support for the charities they care about. With a donor-advised fund, donors are eligible for an immediate tax deduction and then make grant recommendations in the time frame that works best for them.

Learn more about giving with a donor-advised fund

Take action before year-end

If you’re not clear on your tax strategy, act now or talk to your tax advisor to learn more about the impact of tax reform and how you can start planning to maintain your giving for years to come.

Learn more about smart charitable tax strategies

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