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Recent Tax Changes and Charitable Contributions

Thursday, December 28, 2017

To help our donors and supporters stay informed, Burgundy provides this excerpt from a report prepared by PricewaterhouseCoopers and provided by Morgan Stanley Wealth Management.

Filers who plan on utilizing the nearly doubled standard deduction in 2018 will not receive a tax benefit for charitable contributions that year. Those taxpayers may consider accelerating charitable contributions to 2017 to realize the tax benefit now. Such charitable contributions may be paid directly to a charity or to a donor advised fund.

However, taxpayers should consider whether any incremental increase of 2017 charitable contributions may be somewhat limited by the “PEASE limitation”, which kicks in when Adjustable Gross Income exceeds $300,000 (married) or $250,000 (single). Taxpayers should work with their tax professionals to see if the accelerated 2017 donations would be subject to the itemized deduction phase out. (Note: the “PEASE limitation” has been repealed for 2018.)