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Written by Chad Eichorn
From his column Elder Law

elder-law-01-19_article.jpgThe new tax law makes it more difficult to claim a deduction for charitable contributions. While charitable giving for most folks is not about getting a tax break, if you want to receive a tax benefit from giving to churches or other charities, there are a couple of options.

The Tax Cut and Jobs Act of 2017, which became effective in 2018, nearly doubled the standard deduction to $12,000 for individuals and $24,000 for couples. This means if your charitable contributions along with other itemized deductions are less than these amounts, the standard deduction will lower your tax bill more than itemizing. For most people, the standard deduction will be the better option.

However, if you still want to maximize the tax benefits of charitable giving and you have the financial means, one option is to double your charitable donations in one year and then skip your donation the following year. For example, instead of giving $10,000 a year to a charity, you could give $20,000 every other year and itemize your deductions in that year. Note, if you choose to do this in your local church situation, you might want to talk to your pastor or treasurer, so they understand what you’re doing.

If you want to receive a tax benefit from giving to churches or other charities, there are a couple of options.

Another way to concentrate charitable giving is to establish a donor-advised fund (DAF)* through a public charity. A DAF allows you to contribute several years’ worth of charitable donations to a fund and receive the tax benefit immediately. The money is placed in an account where it can be invested and grow tax-free. You can then make donations to charities from the account at any time, and you can add to the account. As with any investment, you need to do research before establishing a DAF. Make sure you understand the fees involved and whether there are limits on the charitable contributions you can make. It’s a good idea to consult your financial adviser if you’re considering a DAF.

If you are taking required minimum distributions (RMDs) from an IRA, another option is to donate those distributions directly to a charity through a qualified charitable donation. Distributions won’t be included in your gross income, which means lower taxes overall. The donation must be made directly from the IRA to the charity, and different IRAs have different rules about how to make the distributions.

These are complicated times when it comes to taxation, and maximizing the benefits of charitable giving is something that requires attention to detail. If you have questions, I recommended speaking with an accountant in your area.

Chad Eichorn is an attorney licensed in Iowa only. This article is provided as legal information only and is not intended as legal advice. If you have questions regarding your specific situation, please contact an estate planning and elder law attorney licensed in your state of residence.

*Editor's Note: The Church of the Nazarene Foundation can assist with the creation of a donor-advised fund. For more information, contact 866-273-2549 or This email address is being protected from spambots. You need JavaScript enabled to view it.

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