The Good and Bad News on Charitable Deductions under the 2017 Act

The good news first:a. The 50% of adjusted AGI limitation maximum deduction amounts in any one year is increased to 60% as to cash contributions.b. The Section 68 3% “Pease limitation” phase-out of itemized deductions is out of the law (through 2015).These changes can significantly increase available deductions, but mostly for higher income persons and/or persons making significant gifts. Thus, one has to wonder whether the loss of deductions under the “bad news” below for many taxpayers will be offset by these increases.The bad news:a. The standard deduction is significantly increased to $12,000 for single people and $24,000 for married taxpayers.b. Many formerly deductible expenses are no longer deductible,or deductions are limited (e.g., $10,000 limit for state and local taxes).This means that for taxpayers making smaller gifts, it will be harder for them to have aggregate deductions above the standard deduction threshold. If deductions are not above…

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