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Has the new tax law affected your charitable giving?

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  • nsward
    replied
    The new tax code has not change our charitable giving.  Mostly because SALT plus our mortgage interest gets us to within a couple thousand of the standard deduction.  In an our ideal situation, we pay no mortgage interest. In that case, we would probably start a DAF.  In general, though, we donate because of our convictions.  Tax benefit is a just a great perk.

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  • BlueCollarMD
    replied




    Yes, we frontloaded our 10+ year old DAF in 2017 with 5-7 years of expected charitable contributions…and then we gave about a third of that to charity in 2018, our largest charitable year ever (including our largest single gift ever). We still gave another couple thousand dollars in smaller donations for which we will not get Federal tax deduction.

     
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    This is exactly what we did.  Also paid off the mortgage in early 2018, so will anticipate being on standard deduction from now on.  When the DAF spends down, we will probably have one more "6 year" DAF contribution to make before eligible for qcd's.  Depending on tax scheme at that time, would presumably itemize that year.

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  • WealthyDoc
    replied
    I don't think so.

    We actually gave more in 2018 even though it won't be deductible.

    I'm sure it will have an impact nationwide though.

     

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  • FIREshrink
    replied
    Koala, it’s all good. We’re all trying. A pat on the shoulder and an encouraging word sometimes go further than a fire and brimstone sermon. It took me a lot of my fifteen years as medical director to learn that lesson.

    I also wish people would be more generous. At least share something. It makes you a better person and, according to studies, a happier person. But beyond that I feel it’s a very personal decision and all I can do is model for my own family what I feel is right. In our culture we have ‘charity’ boxes in the house and our children are taught from an early age to share part of their allowances and gifts as part of a daily or weekly routine. We also discuss our annual giving (though not in dollar terms) with our children to encourage the concept of charity to be a regular part of our lives.

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  • Tim
    replied
    I appreciate that in your work you need or want more resources. I am sure with your years of work in charitable organizations and grant writing you really know how to hit that funding target. In all sincerity, grant administration is a real pain. Try Elon and let me know. Fund raising seems to be a great calling.
    Good luck.

    Leave a comment:


  • FIREshrink
    replied
    Of course. You more or less accused the world's most generous people of being misers. As a spiritual leader you can't be so tone deaf as to believe that would come off well?

    Might need to work on your delivery.

    Leave a comment:


  • portlandia
    replied

    I think we would both agree that charitable giving does wonderful things for the recipient and donor alike. From your post, it sounds like the agreement ends there.





    It won’t change our giving at all. We’ve always given around 10% of our gross, regardless of it being good times or bad. I give because it’s the right thing to do and do it without any expectation of personal benefit. To me, giving in order to maximize my own benefit takes away from the true charity of it. I also know a lot of charities really rely on monthly donations to maintain their operating budget and to be able to help others in an efficient way.
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    Does this mean you don't take advantage of the charitable tax deduction? Maximizing ones financial benefit is not tithing and then taking a tax deduction, it is in being a scrooge and not giving at all. A 28% deduction still leaves one with 72 cents less than if he hadn't donated at all.

    So if someone would normally give $25K/year, what is the problem with them giving $50K every other year? The charity is still getting the same amount of money. They may even get more money as one can give more to charity with a decreased tax burden. Not everyone will be able to bunch charitable donations, but for those than can, what's the problem? Also, if the charity can't manage uneven monthly donations, that is on them, not the donor. This is not a subscription service.

     

     

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  • FIREshrink
    replied
    Koala's opinion is that the highest giving rate in the world is far too low. Entitled to his opinion I guess. He was raised with a set of values. I was taught that I am not instructed by G-d to be Moses, only to be the best FIREshrink I can be. That is hard enough.

    New law didn't affect us. We bunched in 2017 to DAF but won't any longer, as our mortgage interest alone is over the standard deduction. We give away between 4-5% of gross every year, have raised that slowly over time. Prior to buying our new house, charitable giving was our second highest annual expenditure, after travel. Now it's third, after housing and travel.

    We are comfortable with giving away 5% as a long term goal. Our income taxes plus charity add up to 30% of our gross, which feels like my fair share. Arguing we owe more than 1/3 of our labor to others doesn't sit well with me. It doesn't seem consonant with liberty.

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  • artemis
    replied
    I opened a DAF last year, but it was to cut down on paperwork, not to bunch donations across multiple years.  Right now I donate enough yearly that I will still be able to itemize even without bunching 2 or more years' worth of donations.  (I might bunch right before retirement, though, since at that point my income will drop sharply and the only way I'll be able to manage to continue giving at my current level is if I put a large lump sum in my DAF and try to grow it faster than I'm giving it away.)

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  • WuzUpDoc
    replied
    It won’t change our giving at all. We’ve always given around 10% of our gross, regardless of it being good times or bad. I give because it’s the right thing to do and do it without any expectation of personal benefit. To me, giving in order to maximize my own benefit takes away from the true charity of it. I also know a lot of charities really rely on monthly donations to maintain their operating budget and to be able to help others in an efficient way.

    Leave a comment:


  • ITEngineer
    replied


    However, if the mortgage interest and SALT are considered sunk costs, but then I lump charitable every other year perhaps with a DAF, I would get the std deduction one year and $10k in deductions over the std dead limit for the itemized year ($14+10 year 1 + 10 year 2)?
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    That's exactly what I was thinking. I think this scales up though to almost all situations......

    Lets pretend you have $10k in SALT, $0 in Mortgage interest (I use $0 b/c I'm quickly approaching $0 in our own life) and give $30k year to charity.

    Scenario 1:

    Year 1 - $60k in Charity, $10k in SALT for $70k in deduction

    Year 2 - $24k standard deduction

    Total Deductions: $94k

    Scenario 2:

    Year 1 - $10k SALT, $30k Charity

    Year 2 - $10k SALT, $30k Charity

    Total Deductions: $80k

    You already handled the $10k/year Charity contribution. I believe this works for many amounts in between.

    Now - If you have mortgage interest that is deductible it doesn't make sense to alternate. Someone with a $750k mortgage @4% would have $30k/year in mortgage interest. They are going to be itemizing their taxes regardless. But given this audience, I'm assuming more people (51% or greater )are headed towards paid off houses and minimal mortgage interest than looking to get another large mortgage.

    Hopefully I didn't mess up the math.

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  • Larry Ragman
    replied





    Do you plan to bunch charitable deductions going forward (e.g., take the standard deduction in alternate years)? 
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    Yes.

    We opened a DAF in 2017 and put 2018 contributions into it. We will take the standard deduction in 2018 and got to take advantage of the larger tax break for 2017.

    For 2019 we will give regularly, but in December we will make another contribution to the DAF for 2020 and itemize our taxes for 2019.

    This can be a wise approach for those whom give between $10-20k/year. Anything less than $10k/year and you probably aren’t itemizing anyway. Anything more than $20k and I don’t know if there is enough of a financial benefit to compensate you for the hassle……

    On second though…..how much would I donate before I wouldn’t consider doing this? I’m not sure……..
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    i was just thinking about this some more. I guess the advantage is the delta between otherwise tax deductible payments and the $24k married std deduction limit? So, hypothetically if I had $14k in potential deductions other than charitable (e.g., mortgage interest and SALT) and $10k of potential charitable, that year there would be no tax advantage to itemizing. However, if the mortgage interest and SALT are considered sunk costs, but then I lump charitable every other year perhaps with a DAF, I would get the std deduction one year and $10k in deductions over the std dead limit for the itemized year ($14+10 year 1 + 10 year 2)?

    Leave a comment:


  • The White Coat Investor
    replied
    Funny what becomes controversial about here. Giving. Marriage. Medicaid. Not taking medicaid.

    Tolerance is a pretty useful quality in a society where people are allowed to have their own opinions.

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  • Tim
    replied
    I was sooooo relieved this wasn’t about the rest of the world. If you write a check for $100k, good for you. This concerns me only if it’s made payable to me. Use it how you wish.
    Actually, I would prefer you just being a good person and a role model for the neighborhood, or a good friend.
    You see, some people have a low pain tolerance. Give till it hurts! Suit yourself.

    Leave a comment:


  • ITEngineer
    replied


    Do you plan to bunch charitable deductions going forward (e.g., take the standard deduction in alternate years)?
    Click to expand...


    Yes.

    We opened a DAF in 2017 and put 2018 contributions into it. We will take the standard deduction in 2018 and got to take advantage of the larger tax break for 2017.

    For 2019 we will give regularly, but in December we will make another contribution to the DAF for 2020 and itemize our taxes for 2019.

    This can be a wise approach for those whom give between $10-20k/year. Anything less than $10k/year and you probably aren't itemizing anyway. Anything more than $20k and I don't know if there is enough of a financial benefit to compensate you for the hassle......

    On second though.....how much would I donate before I wouldn't consider doing this? I'm not sure........

    Leave a comment:

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