How to get a tax break for charitable donations under the Republican tax bill

How to get a tax break for charitable donations under the Republican tax bill

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With tax rates poised to go down, you’ll get more bang for your buck if you donate as much as you can to charity by Dec. 31 and claim the deduction on this year’s income. “Because the tax rates are higher this year than they will be next year, the value of your tax incentive is better this year,” said David L. Thompson, vice president of public policy for the National Council of Nonprofits.

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“The vast majority of taxpayers are going to take the standard deduction,” said Thompson. “That means most taxpayers have no incentive to give to charity. That’s a serious concern. We fully expect the doubling of the standard deduction to reduce giving by $13 to $20 billion a year.”
 
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The tax reform bill increases the maximum taxpayers can donate to charities in cash, raising the limit to 60% of adjusted gross income from the current 50%, according to the National Council of Nonprofits. “That’s a good thing,” said Thompson, but it only applies to the roughly 5% of taxpayers who are expected to itemize under the new law.
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