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  • Writer's pictureMMH CPA

New Approaches for Charitable Deductions



Your charitable contribution deductions are still a great tax savings tool, but they may require more planning than in previous years to make the most of your donations.


Typically, cash and non-cash charitable donations can be deducted on an itemized return. But with the 2023 standard deductions now at $13,850 for single filers and $27,700 for married joint filers, itemizing every year is less beneficial for many taxpayers.


This is especially so because many other itemizeable deductions have been reduced in recent years, including miscellaneous itemized deductions, state and local tax deductions, and home loan interest deductions.


You'll likely still want to itemize deductions if you have a home mortgage, have high medical bills, give often to charities, or if you are single and have high property or state income taxes.


Leverage charitable tax planning


If you want to donate and get beneficial tax treatment, you can still make it work. Here's how to make sure your donations are maximized:


  • Conduct a year-end tax forecast. Plan now to see how close the amount of all your yearly itemizeable items will come to exceeding your standard deduction threshold.


  • Bundle two-in-one. Consider bundling two years of charitable giving into one year. This will allow you to maximize your itemizations in one year, while using the tax savings of the standard deduction in the other year to help pay for your donations.


  • Maximize your charitable deduction. When you can take advantage of the charitable deduction, consider donating appreciated stock held longer than one year. This is a better alternative than writing a check as you avoid paying capital gains and you can deduct the fair market value of the stock as a donation.


Itemized deduction rules have changed, but you can still take advantage of the tax deductibility of your charitable giving. You simply need to adjust your tax planning. Contact us if you would like to discuss this or any other tax-planning strategies.

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