Will you donate less to Charity?
Will you donate less to Charity?
First, we have had a DAF for many years and donate to charity both from the DAF and with cash throughout the year. Our DAF is funded from deductible share gifts to avoid capital gains taxes, too.
However, the tax law change will mean that our usual level of giving will not be deductible anymore and that creates a behavioral tinge for me (but probably not my spouse). Sure, we will be able to avoid long-term capital gains by continual donations, but the added kicker of reducing taxable income will no longer be there.
So one way out is to up our game and increase our donations while still bunching major gifting into every other year.
It seems many of you are trying to get DAFs and contributions going here at the end of 2017, but does that mean less giving to charities over the next few years? Have you thought about that?
However, the tax law change will mean that our usual level of giving will not be deductible anymore and that creates a behavioral tinge for me (but probably not my spouse). Sure, we will be able to avoid long-term capital gains by continual donations, but the added kicker of reducing taxable income will no longer be there.
So one way out is to up our game and increase our donations while still bunching major gifting into every other year.
It seems many of you are trying to get DAFs and contributions going here at the end of 2017, but does that mean less giving to charities over the next few years? Have you thought about that?
Re: Will you donate less to Charity?
i'll probably continue giving at about the same rate, but I give only about about 1.5% of income rate. we do not have a DAF.
- White Coat Investor
- Posts: 17413
- Joined: Fri Mar 02, 2007 8:11 pm
- Location: Greatest Snow On Earth
Re: Will you donate less to Charity?
No, plan to give the same. But we also give enough that itemized deductions are more than the standard in most years.
1) Invest you must 2) Time is your friend 3) Impulse is your enemy |
4) Basic arithmetic works 5) Stick to simplicity 6) Stay the course
Re: Will you donate less to Charity?
With the repeal of the Pease limitation, my charitable donations just got more valuable. And they are more valuable to me next year. So my 2017 annual charity checks are going out in 2018 (instead of next week).
Last edited by NYC_Guy on Sat Dec 23, 2017 10:06 pm, edited 1 time in total.
Re: Will you donate less to Charity?
I'm thinking I will probably double up on moving shares of company stock into my DAF every other year and keep my annual giving from that source about the same. I'll see how I feel when I start doing QCDs in 2019. I could conceivably do all my giving with QCDs eventually if my RMDs get too big, but my former employer offers a match for the non-QCD donations, which is a motivation to give up to the top of the match.
-
- Posts: 12073
- Joined: Fri Sep 18, 2009 1:10 am
Re: Will you donate less to Charity?
Deleted
Last edited by letsgobobby on Thu Jul 11, 2019 3:40 pm, edited 1 time in total.
Re: Will you donate less to Charity?
I'm among the many folks who will no longer benefit from itemizing in 2018 and the following several years, at least. I've set up and am pre-funding a DAF with 4-5 years worth of charitable donations precisely because I don't want to give less to charity in future years and know that many of the small charities that I support are not sophisticated enough to "spread" a one-time 2017 donation across 4-5 years even if I tell them I won't be giving my usual amount in future years.
In other words, I plan to give at least as much in future years as this year, but some of those donations will come from my DAF rather than from my checking account. I will not be giving as much from my checking account in the next few years, since I'm bunching the donations in this year to get the advantage of itemizing.
For context, I donate about 6% of AGI in a typical year.
In other words, I plan to give at least as much in future years as this year, but some of those donations will come from my DAF rather than from my checking account. I will not be giving as much from my checking account in the next few years, since I'm bunching the donations in this year to get the advantage of itemizing.
For context, I donate about 6% of AGI in a typical year.
Re: Will you donate less to Charity?
I plan to continue my current level of giving, but fund most of it in odd numbered years and use standard deduction in even numbered years.
- SimpleGift
- Posts: 4477
- Joined: Tue Feb 08, 2011 2:45 pm
Re: Will you donate less to Charity?
Since we have "enough" in retirement and our portfolio is nearly all taxable, we rebalance by donating appreciated shares directly to our Vanguard Donor Advised Fund. As this rebalancing is only done after years with large stock run-ups, our DAF contributions tend to be large lump sums of appreciated shares — and I expect we will still be itemizing in those years, even with the new higher standard deductions.
Since all of our annual charitable giving then comes from the DAF, I don't see the new tax law changing the level or timing of our future donations.
Last edited by SimpleGift on Sat Dec 23, 2017 10:19 pm, edited 1 time in total.
-
- Posts: 2365
- Joined: Tue May 27, 2014 3:50 pm
Re: Will you donate less to Charity?
I will use qualified charitable distribution of RMD when I reach 70.5. Until then, I will likely bunch deductions (charitable donations, property tax, state sales tax) every other year, taking care to purchase cars in an itemized year.
Re: Will you donate less to Charity?
I will probably end up with a standard deduction. I therefore just opened a DAF and will probably add another charity to my pretax payroll donations next year.
Re: Will you donate less to Charity?
https://www.google.com/search?q=DAF&ei= ... 80&bih=919
Department of Agriculture and Fisheries?
DAF trucks?
Deutsch Amerikanische Freundschaft or D.A.F. is an influential German electropunk/Neue Deutsche Welle band from Düsseldorf
A large frame drum, resembling a tambourine, used to accompany popular and classical music in the Middle East.
This android application implements Delayed Auditory Feedback (DAF) technique, which is known to help people with stuttering to speak more fluently.
The Discretionary Assistance Fund is a fund of last resort.
Department of Agriculture and Fisheries?
DAF trucks?
Deutsch Amerikanische Freundschaft or D.A.F. is an influential German electropunk/Neue Deutsche Welle band from Düsseldorf
A large frame drum, resembling a tambourine, used to accompany popular and classical music in the Middle East.
This android application implements Delayed Auditory Feedback (DAF) technique, which is known to help people with stuttering to speak more fluently.
The Discretionary Assistance Fund is a fund of last resort.
70/30 AA for life, Global market cap equity. Rebalance if fixed income <25% or >35%. Weighted ER< .10%. 5% of annual portfolio balance SWR, Proportional (to AA) withdrawals.
-
- Posts: 1264
- Joined: Sat Jan 04, 2014 10:08 am
Re: Will you donate less to Charity?
No decrease, just rearranging the pieces. Will bunch 5 years worth of gainers to DAF this year, continue miscellaneous smaller donations throughout the year. Down the road, will again look to the most tax advantaged strategy for continuing our giving.
Re: Will you donate less to Charity?
I'll probably give a little less.
I don't have any charities that I'm particularly fond of, but I try to give some money to places like my alma mater or the Wikimedia foundation during their funding drives. It sounds kinda callous, but the deductibility is always part of how I rationalize/justify the expense. When push comes to shove, I can see myself trimming those random $100 donations throughout the year to $50-75 instead.
I don't have any charities that I'm particularly fond of, but I try to give some money to places like my alma mater or the Wikimedia foundation during their funding drives. It sounds kinda callous, but the deductibility is always part of how I rationalize/justify the expense. When push comes to shove, I can see myself trimming those random $100 donations throughout the year to $50-75 instead.
Re: Will you donate less to Charity?
It does not affect me as I only give a small amount to the university that I work for every year. I no longer give yearly donations to other charities as I am saving to make a larger donation for a project.
Re: Will you donate less to Charity?
I don't think I will be giving less, but then again, I don't think I will be giving more, either. As I will be taking the standard deduction, and not be able to deduct charitable contributions, I don't think I will be as motivated to "up my game". I think it was a big mistake to not allow charitable deductions on top of the standard deduction. I think this was very short-sighted and will hurt charities greatly.
Re: Will you donate less to Charity?
Agree completely. As much as I'd like to believe that giving either time or money to make the world a better place is a good in and of itself, people do respond to incentives. Before, we incentivized charity, now we don't. Contributions will inevitably be lower. I'll still give, of course, but will I give quite as much? I just don't know.El Greco wrote: ↑Sat Dec 23, 2017 11:17 pm I don't think I will be giving less, but then again, I don't think I will be giving more, either. As I will be taking the standard deduction, and not be able to deduct charitable contributions, I don't think I will be as motivated to "up my game". I think it was a big mistake to not allow charitable deductions on top of the standard deduction. I think this was very short-sighted and will hurt charities greatly.
- PhysicianOnFIRE
- Posts: 470
- Joined: Fri Jan 08, 2016 2:46 pm
- Location: Up North
Re: Will you donate less to Charity?
That's not how the Pease limitation works. It's a 1% to 1.2% surtax on income disguised as a limitation on itemized deductions. You may want to reconsider as you're quite possibly in a lower marginal income tax bracket next year.
I'll be giving more in future years, but via our DAF and very little directly. I've decided to take my tax deductions up front and donate slowly over many years. This month, I topped off our DAF(s) to my goal of 10% of our retirement nest egg. I may add to to our DAF accounts later on, and I would do it as a lump sum later on.
-PoF
-
- Posts: 345
- Joined: Sat Jul 30, 2011 2:01 pm
Re: Will you donate less to Charity?
post removed
Last edited by libralibra on Sat May 25, 2019 12:28 am, edited 1 time in total.
Re: Will you donate less to Charity?
I have never given to charity because of federal tax deductions. It was a nice benefit, but that was not the reason. I give because of needs. However, I do give to two state universities because of a special Indiana state deduction and that is I can give up to $400 each year to Indiana state colleges or universities and reduce my state tax by $200. If I didn't receive that $200 I probably would not have given to them.
I will not give less from this point on because of the recent tax legislation. To the contrary, I will give a higher amount each year as I have in the last 10 years in retirement because the needs are so great and I can afford to do so.
I will not give less from this point on because of the recent tax legislation. To the contrary, I will give a higher amount each year as I have in the last 10 years in retirement because the needs are so great and I can afford to do so.
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
Re: Will you donate less to Charity?
You're talking idealism. We're talking human nature. I'll wager any amount of money that human nature trumps idealism when the subject is reality. I am quite confident that by effectively eliminating charitable deductions for millions of taxpayers, there will be significantly less contributions made. As a matter of fact my wife and I just had dinner with the President of a well-known charity last night. She expressed great concern that donations would be severely curtailed in the future due to the new rules.by libralibra » Sun Dec 24, 2017 12:53 am
By that argument, raising tax rates should increase charitable giving, right? But then people would just say they have less money so will give less! Both these arguments cannot be true.
Last edited by El Greco on Sun Dec 24, 2017 12:23 am, edited 1 time in total.
Re: Will you donate less to Charity?
Sure, but they also have more money to spend (or save) for any purpose at all. Itemizing specifically incentivizes donation, by making $1 of donations worth more than $1 pretax. Less itemizing means less direct financial incentive to donate.libralibra wrote: ↑Sat Dec 23, 2017 11:53 pmBy that argument, raising tax rates should increase charitable giving, right? But then people would just say they have less money so will give less! Both these arguments cannot be true.crumbone wrote: ↑Sat Dec 23, 2017 11:27 pmAgree completely. As much as I'd like to believe that giving either time or money to make the world a better place is a good in and of itself, people do respond to incentives. Before, we incentivized charity, now we don't. Contributions will inevitably be lower. I'll still give, of course, but will I give quite as much? I just don't know.El Greco wrote: ↑Sat Dec 23, 2017 11:17 pm I don't think I will be giving less, but then again, I don't think I will be giving more, either. As I will be taking the standard deduction, and not be able to deduct charitable contributions, I don't think I will be as motivated to "up my game". I think it was a big mistake to not allow charitable deductions on top of the standard deduction. I think this was very short-sighted and will hurt charities greatly.
I'd say if people are saving on taxes, then they have more money to give, not less.
Some of this is economic, some it probably behavioral, but before it felt not just good (again, it is still very very good) but smart to donate.
Re: Will you donate less to Charity?
This is a good idea. I will likely do the same. If they didnt limit the SALT deduction to $10k, I could still itemize.
-
- Moderator
- Posts: 6110
- Joined: Mon Feb 01, 2016 8:46 pm
Re: Will you donate less to Charity?
I convinced my spouse to load up our DAF since it doesn’t look like we will be itemizing under the new tax plan. We will put about 5-7 years of donations into it.
It does look bad for charities under this plan, given ‘human nature’.
It does look bad for charities under this plan, given ‘human nature’.
Re: Will you donate less to Charity?
What is a DAF? When does it make sense to use one?
Re: Will you donate less to Charity?
You appear to be conflating two different things. There is a wealth effect ("I have more money, so I give more"), as well as a distortionary effect by letting people deduct contributions ("Although I gave $100 to charity, I only had to give up $50 I would otherwise spend on other things").libralibra wrote: ↑Sat Dec 23, 2017 11:53 pmBy that argument, raising tax rates should increase charitable giving, right? But then people would just say they have less money so will give less! Both these arguments cannot be true.crumbone wrote: ↑Sat Dec 23, 2017 11:27 pmAgree completely. As much as I'd like to believe that giving either time or money to make the world a better place is a good in and of itself, people do respond to incentives. Before, we incentivized charity, now we don't. Contributions will inevitably be lower. I'll still give, of course, but will I give quite as much? I just don't know.El Greco wrote: ↑Sat Dec 23, 2017 11:17 pm I don't think I will be giving less, but then again, I don't think I will be giving more, either. As I will be taking the standard deduction, and not be able to deduct charitable contributions, I don't think I will be as motivated to "up my game". I think it was a big mistake to not allow charitable deductions on top of the standard deduction. I think this was very short-sighted and will hurt charities greatly.
I'd say if people are saving on taxes, then they have more money to give, not less.
Usually these forces push people in the same direction. Changes in the tax code are one of the rare circumstances where you have a tension between the two.
That said, both of these are "true" reasons why a person might give more/less to charity. Personally, I'm skeptical that a 2-3% increase in total take-home pay would produce a net increase in charitable giving for most of the people losing out on the deductibility. But a lot of it will boil down to a person's individual temperament and level of giving relative to their income.
Last edited by Ragnoth on Sun Dec 24, 2017 12:50 am, edited 1 time in total.
-
- Moderator
- Posts: 6110
- Joined: Mon Feb 01, 2016 8:46 pm
Re: Will you donate less to Charity?
A DAF is short hand for a donor advised fund. You can look these up in the WIKI and on the Vanguard and Fidelity websites. I think Ron Lieberman also had an article in the last day or 2 on The NY Times regarding how now was the time to do one.
Essentially, you can easily give money and/or appreciated funds to the DAF. It is a donation that is deductible in full at the time you give it to the DAF- you can never get it back. But you can direct the investments (Boglehead style), and recommend donations to the charity of your choice in future years. In the past it has been useful for people who like to bunch deductions into every other year, and then take the standard deduction in the odd years.
For people who have always itemized, but won’t under the new tax plan, the next 7 days is the time to load it up so as to get the itemized deduction for 2017.
Any questions after looking at these references, just ask.
-
- Posts: 2630
- Joined: Thu Jun 20, 2013 11:00 pm
Re: Will you donate less to Charity?
I wasn't necessarily expecting to itemize over the next few years, so I loaded up the DAF with about six years worth of contributions in my last full year of working even before the new tax law. I don't expect anything different in our donations over the next few years. In the future, I may do an "every five years" large DAF donation, combining it with any other deduction bunching I can fit in.
-
- Posts: 345
- Joined: Sat Jul 30, 2011 2:01 pm
Re: Will you donate less to Charity?
post removed
Last edited by libralibra on Sat May 25, 2019 12:28 am, edited 1 time in total.
Re: Will you donate less to Charity?
A lot. Spouse is pretty generous and this has been our pattern/habit for many years. We front-loaded a DAF earlier this year, mostly by coincidence, with ~ 5+ years worth of giving. Not sure what we will do after that but at least it will give me a lot of time to model the tax impact either way. I think this is one of the awful consequences of this ill-thought-out plan. Disincentivizes donations from state-income-tax states, and to the causes they support. Maybe it was carefully thought out after all.
"I mean, it's one banana, Michael...what could it cost? Ten dollars?"
- whodidntante
- Posts: 13114
- Joined: Thu Jan 21, 2016 10:11 pm
- Location: outside the echo chamber
Re: Will you donate less to Charity?
The non-profit/charity sector in the USA is larger than in other countries, even after adjusting for the size of our economy. It's not that Americans are more generous IMO. It's that we made a tradeoff. Government provides fewer and thinner services, and we delegate more to the non-profit sector. People see needs all over the place and chose to close the gap.
I've been itemizing for many years now. I will not itemize every year now. The deductibility of my donations is not the only reason I do it, and some of my giving will continue regardless. But I have to admit that I will look harder at my donations, now that there will be years where I do not get a tax benefit.
I've been itemizing for many years now. I will not itemize every year now. The deductibility of my donations is not the only reason I do it, and some of my giving will continue regardless. But I have to admit that I will look harder at my donations, now that there will be years where I do not get a tax benefit.
Re: Will you donate less to Charity?
The Washington Post has a story on this subject....
https://www.washingtonpost.com/business ... 0eb5246dee
https://www.washingtonpost.com/business ... 0eb5246dee
Taylor worries the tax bill will force United Way to change whom it targets for fundraising.
“We don’t have any choice but to look to those higher-end donors more. We have to,” Taylor said. “But it’s not really what we want to do, and it’s not really healthy for the charitable sector in America.”
catdude |
|
All generalizations are false, including this one.
Re: Will you donate less to Charity?
We will continue to tithe to our church. 10% of our income is nothing when compared to all the blessings we have received. (Malachi 3:10)
I don't know what the future holds, but I know who holds my future.
Re: Will you donate less to Charity?
Actually looking to give more this year. (I’m working towards 10% but not there yet.) IMO, the act of giving is primary while the act of maximizing a deduction (while still important to proper money management) is secondary. I don’t want to let the secondary dictate the primary. Besides, you only really get to keep that which you give away.
-
- Posts: 12277
- Joined: Wed Jan 11, 2017 7:05 pm
Re: Will you donate less to Charity?
We overfunded our DAF this year to cover donations for the next few years. Our actual donation level won't change.
Re: Will you donate less to Charity?
Yes. Charitable deductions only benefited me in a few years, where I set up unusually large donations and then bunched other factors such as property taxes. But that will not happen now.
- oldcomputerguy
- Moderator
- Posts: 17934
- Joined: Sun Nov 22, 2015 5:50 am
- Location: Tennessee
Re: Will you donate less to Charity?
For the last couple of years our itemized deductions did not exceed the standard deduction anyway, so I don't see a big behavioral change coming on that front. That being said, no, our donating to charity rests less on wanting to reduce taxable income and more on wanting to help causes we believe in, at least at this point in our lives.
There is only one success - to be able to spend your life in your own way. (Christopher Morley)
Re: Will you donate less to Charity?
#1 Thanksbirdog wrote: ↑Sun Dec 24, 2017 6:20 am Actually looking to give more this year. (I’m working towards 10% but not there yet.) IMO, the act of giving is primary while the act of maximizing a deduction (while still important to proper money management) is secondary. I don’t want to let the secondary dictate the primary. Besides, you only really get to keep that which you give away.
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
Re: Will you donate less to Charity?
#1 Thanksoldcomputerguy wrote: ↑Sun Dec 24, 2017 6:44 am For the last couple of years our itemized deductions did not exceed the standard deduction anyway, so I don't see a big behavioral change coming on that front. That being said, no, our donating to charity rests less on wanting to reduce taxable income and more on wanting to help causes we believe in, at least at this point in our lives.
Unless you try to do something beyond what you have already mastered you will never grow. (Ralph Waldo Emerson)
Re: Will you donate less to Charity?
Plan to give about the same. Retired this year, and with expected lower taxable income in future years, we were considering a DAF this year- the new tax law made it a no-brainer.
We funded the DAF with about 10 years of typical charitable giving from appreciated stock in a taxable account. Depending on returns from DAF, we may actually increase our contributions.
We funded the DAF with about 10 years of typical charitable giving from appreciated stock in a taxable account. Depending on returns from DAF, we may actually increase our contributions.
-
- Posts: 382
- Joined: Wed May 14, 2008 4:11 pm
Re: Will you donate less to Charity?
We put about 5 years into our DAF and will continue our donations from that at the same rate (about 5% of AGI). We will probably take more "gifts" with the donations we do outside the DAF (the kind that give us membership and/or benefits) since we won't be deducted them.
My experience as a tax accountant is that many people think they get a tax advantage even if they aren't actually itemizing. They also think the donations make a bigger tax difference than in reality. So, I believe it will make a difference for charitable giving overall. I also think the 1% who "don't give to charity much because I pay too much in taxes" - I'm way too lazy this morning to find a link to the article - still won't give more to charity in spite of lower taxes because that was a just a convenient excuse. But, then, I am crazy cynical and pessimistic.
My experience as a tax accountant is that many people think they get a tax advantage even if they aren't actually itemizing. They also think the donations make a bigger tax difference than in reality. So, I believe it will make a difference for charitable giving overall. I also think the 1% who "don't give to charity much because I pay too much in taxes" - I'm way too lazy this morning to find a link to the article - still won't give more to charity in spite of lower taxes because that was a just a convenient excuse. But, then, I am crazy cynical and pessimistic.
Re: Will you donate less to Charity?
Acronym for Donor Advised Fund. You direct a donation to the fund (minimum is usually at least 5K), in return for a charitable donation deduction in the year of the donation. You can then donate to charities of your choice in the year of the donation or future years. Charities donated to must be a 503c3 organization.
Many DAFs are setup with taxable appreciated assets(usually equities), and donors may typically bunch several years of expected giving into one donation year (using the DAF) in order to minimize taxes in a certain year. With new standard deduction thresholds next year, many tax filers are realizing they may not get a tax benefit from charitable donations, and are using a DAF to bunch future year donations into 2017.
Vanguard, Fidelity, Schwab, offer these funds, but time is running out to open one in 2017, unless you already have a brokerage with one of these firms.
Re: Will you donate less to Charity?
Tax consideration was never a factor in my level of giving. I did things to enhance my taxes(like donating this month for next year's giving) but it was never a factor in my level of giving. My level of giving will not change due to tax considerations.
"Earn All You Can; Give All You Can; Save All You Can." .... John Wesley
Re: Will you donate less to Charity?
Absolutely not.
2 points:
2/3 of our country do not itemize and they still give. 1 report said Mississippi was the most generous by percentage despite its poverty. I suspect many who itemize are quite miserly in comparison, even the one's who tithe to a religion. Ever heard of the which 10% debate with AGI vs gross? The poorer don't consider such things.
1 poster mentioned they will look more closely at their donations now. This is a good thing. Some charities are pretty self enriching and prey on those who hate our government. "Give a little to us and screw Uncle Sam!" Some foundations are pretty self serving including one's setup by BOTH recent presidential candidates.
I personally will still benefit from itemizing due to high income plus high percentage of charitable contributions but I believe they should have axed all of Schedule A. This new tax reform will make Schedule A "a tool of the top 10%" making it more of a political target in the future.
2 points:
2/3 of our country do not itemize and they still give. 1 report said Mississippi was the most generous by percentage despite its poverty. I suspect many who itemize are quite miserly in comparison, even the one's who tithe to a religion. Ever heard of the which 10% debate with AGI vs gross? The poorer don't consider such things.
1 poster mentioned they will look more closely at their donations now. This is a good thing. Some charities are pretty self enriching and prey on those who hate our government. "Give a little to us and screw Uncle Sam!" Some foundations are pretty self serving including one's setup by BOTH recent presidential candidates.
I personally will still benefit from itemizing due to high income plus high percentage of charitable contributions but I believe they should have axed all of Schedule A. This new tax reform will make Schedule A "a tool of the top 10%" making it more of a political target in the future.
-
- Posts: 8954
- Joined: Thu Feb 25, 2016 6:11 pm
Re: Will you donate less to Charity?
True charity comes from a generous heart not from thought of personal benefit. What a shame it would be to give less in the absence of a tax benefit. It reminds me of a line from a classic holiday song "You're a Mean One,Mr. Grinch!".
Re: Will you donate less to Charity?
No, but we will continue to be strategic about the timing of the donations. We are putting 5 years of donations in our DAF this week not because we will lose the ability to itemize, but because a) our marginal tax rate will be lower going forward, so our donation is worth more now, and b) we owe a lot of taxes this year, and we would rather donate $1 to charity than pay Uncle Sam $.40.
Re: Will you donate less to Charity?
I remember the day, way back when I just started filing a tax return, that charitable deductions were on page 1 of the 1040A, before the final AGI determination. This incentivized charitable contributions for folks who didn't itemize.
"Happiness Is Not My Companion" - Gen. Gouverneur K. Warren. |
(Avatar is the statue of Gen. Warren atop Little Round Top @ Gettysburg National Military Park.)
Use RMD from Traditional IRA
If you are over 59 &1/2 you can have your IRA withdrawal go directly to a charity and those dollars won't be taxed. I don't have a DAF I just call Vanguard and give them the details. They send me the checks made out to the charity with my name on them.
-
- Posts: 4387
- Joined: Mon May 26, 2008 10:20 am
- Location: Second star on the right and straight on 'til morning
Re: Will you donate less to Charity?
Thank you for high lighting the reason for charitable giving.Sheepdog wrote: ↑Sun Dec 24, 2017 12:13 am I have never given to charity because of federal tax deductions. It was a nice benefit, but that was not the reason. I give because of needs. ... I will not give less from this point on because of the recent tax legislation. To the contrary, I will give a higher amount each year as I have in the last 10 years in retirement because the needs are so great ...
FI is the best revenge. LBYM. Invest the rest. Stay the course. Die anyway. - PS: The cavalry isn't coming, kids. You are on your own.
Re: Will you donate less to Charity?
My 2017 state/local marginal rate is nearly 13%, which effectively reduces my Federal marginal rate by about 4% due to SALT deductability (after giving effect to the Pease limit). Put another way, for every additional dollar I contribute to charity in 2017, I save about 48 cents in tax. Next year, my state and local income tax remains the same but my federal marginal rate increases from 35.6% (39.6% less the ~4% offest due to SALT deductability) to 37%. So charitable contributions will save me about 50 cents for every dollar next year. This is the math for living in NYC or California and being in the highest bracket. I understand why Kitces described the effect the Pease limit the way he did, but it really only holds true when SALT was a base deduction...if Pease had stayed in place, charitable contributions would have been hit very hard.PhysicianOnFIRE wrote: ↑Sat Dec 23, 2017 11:41 pmThat's not how the Pease limitation works. It's a 1% to 1.2% surtax on income disguised as a limitation on itemized deductions. You may want to reconsider as you're quite possibly in a lower marginal income tax bracket next year.
I'll be giving more in future years, but via our DAF and very little directly. I've decided to take my tax deductions up front and donate slowly over many years. This month, I topped off our DAF(s) to my goal of 10% of our retirement nest egg. I may add to to our DAF accounts later on, and I would do it as a lump sum later on.
-PoF