Giving is more important than just a tax write off, say representatives of Wabash Valley Non-Profits, a group of five non-profit organizations seeking to provide information on smart charitable giving under the federal Tax Cuts and Jobs Act of 2017.
"This will be the first year donors will experience an increase in standard deductions for tax purposes," said Jennifer Buell, development director at Catholic Charities Terre Haute.
"These changes were made law earlier this year, so it’s important to consult with your tax adviser a little earlier than you might have in the past," Buell said.
Christian Shuck, volunteer with Council on Domestic Abuse, said the standard deduction has doubled for individuals and married couples. Last year the standard deduction on a tax return was $12,500, but now it is $25,000.
Last year, an average couple may have itemized deductions, including a gift to charitable organizations, to help reduce their overall tax bill, Shuck said.
However, while that average couple may previously been able to itemize up to $15,000, the new deductible limit is $25,000.
"So for this couple, itemizing doesn't help them from a tax point," Shuck said. "The overall concern is that people who are giving $2,000 or $3,000 a year for tax purposes ... what does that mean when filing taxes next year.
"I think it warrants all of us coming together to share that message that yes, (tax deduction) is an important thing to consider, but that doesn't mean you have to stop giving. Just because it doesn't reduce your tax liability doesn't mean you have to stop giving."
Beth Tevlin, executive director of the Community Foundation of the Wabash Valley, said despite the tax overhaul, people can still make a gift to charitable organizations.
One way is for those age 70 1/2 or older, who are required to take a minimum distribution from an Individual Retirement Account (IRA), is to have their IRA custodian make a direct contribution to a non-profit or charitable organization.
"It can be up to $100,000, which is passed directly to the charitable organization, and will eliminate the necessity of paying an income tax on the contributions," Tevlin said.
Another way is if a person has a stock that has appreciated significantly over a period of years, that person can give the stock to the Wabash Valley Community Foundation or other charitable organization and avoid paying capital gains tax on the increase in value.
"Overall, you hear some people say, 'Oh people will not be giving because of [a lack of tax break]', but while tax purposes may be beneficial to all types of donors, there are a fewer number of people who solely give because of income tax benefits," Tevlin said.
"Most people give because they want to give back, they want to help people, they like the organization that they are giving to and see the positive impact on the community," Tevlin said.
"Yes, I think that there will be some people who chose not to give, but I think more people will say, 'You know, this has been a really good year for me. Financially, my investments are up and things are going well, I want to give something back to the community,' because that is part of that generosity and philanthropic spirit that is so prevalent here and in the United States," Tevlin said.
Abby Desboro, communications director for the United Way of the Wabash Valley, said people seeking to donate to a charity, but are unsure of where to give, can visit GuideStar.org or CharityNaviagtor.org to search financial status of charitable organizations, what it funds and who are directors and officers of the organizations.
Buell suggests donors also call agencies and speak with directors and if possible, make a visit to the organization that they are considering to make a financial contribution.