WASHINGTON — With 2019 less than two weeks away, there is still time to think about how charitable gifts can impact your income taxes for 2018.
“You really have until the last minute on charitable giving,” said Barry Glassman, the president of Glassman Wealth Services. “But there are some advance strategies you need to consider.”
That begins with knowing 2018’s standard deduction for married couples: $24,000 (a significant increases from 2017’s standard deduction of $12,700). For heads of household, it’s $18,000 in 2018. And for individuals it’s $12,000. If you’re 65 or older, it’s even higher.
“You won’t get the full benefit itemized deduction if it doesn’t add up to more than that,” Glassman told WTOP’s Shawn Anderson and Hillary Howard.
One way to exceed that: Bunch next year’s donations with this year’s, so that you pass that threshold for the calendar year.
“A lot of people hesitate, because they don’t necessarily want to give two years’ worth to their church, or they don’t know the charities that they want to give to,” Glassman said.
Such taxpayers can use a donor-advised fund, which most brokerage firms have. Gift the assets by Dec. 31, and you’ll get the benefits of a deduction, “but you don’t have to decide which final charities get those dollars just yet,” he said.
“You can dole those dollars out over time, so you can get the deduction this year but decide where the money goes finally later on.”
Another charitable option that older taxpayers can consider moving forward is gifting required distributions from IRA: “More and more — I would even say most — of our clients who are over age 70 who are charitably inclined are using this tool in the future,” Glassman said.
© 2018 WTOP. All Rights Reserved. This website is not intended for users located within the European Economic Area.