What you need to know about year-end charitable giving in 2017

Charitable giving can be a robust tax-saving strategy: Donations to qualified charities are fully deductible, and you have complete control over when and how much you give. Here are some important considerations to keep in mind this year to ensure you receive the tax benefits you desire.

Delivery date

A charitable donation must be made by Dec. 31, 2017, for inclusion on your 2017 return. According to the IRS, a contribution is “made” at the time of its “unconditional delivery.” But what does this mean? Is it the date you, for example, write a check or make an online gift via your credit card? Or is it the date the charity receives the funds — or perhaps the date of the charity’s acknowledgment of your contribution?

The delivery date depends in part on what you donate and how you give it. Here are a few examples of regular donations:

Check. The date you mail it.

Credit card. The date you make the charge.

Pay-by-phone account. The date the financial institution pays the amount.

Stock certificate. The date you mail the adequately endorsed stock certificate to the charity.

Qualified charity status

To be deductible, a donation also must be made to a “qualified charity” — one that’s eligible to receive tax-deductible contributions.

The IRS’s online search tool, Exempt Organizations (EO) Select Check, can help you more easily find out whether an organization is eligible to receive tax-deductible charitable contributions. You can access EO Select Check at http://apps.irs.gov/app/eos. Information about agencies qualified to accept deductible donations is updated monthly.

Potential impact of tax reform

The charitable donation deduction isn’t among the deductions eliminated or reduced under proposed tax reform. In fact, income-based limits on deductibility in a particular year might be expanded, which will benefit higher-income taxpayers who make substantial charitable gifts.

However, for many taxpayers, accelerating into this year donations that they might typically give next year may make sense for a couple of tax-reform-related reasons:

1. If your tax rate goes down for 2018, then 2017 donations will save you more tax because deductions are more powerful when rates are higher.
2. If the standard deduction increases significantly and many itemized deductions are eliminated or reduced, then it may not make sense for you to itemize deductions in 2018, in which case you wouldn’t directly benefit from a charitable donation deduction next year.

Many additional rules apply to the charitable donation deduction, so please contact us if you have questions about the deductibility of a gift you’ve made or are considering  — or the potential impact of tax reform on your charitable giving plans.