Don't Mess With Taxes

Congratulations! You made it through Thanksgiving. And Black Friday, Small Business Saturday and Cyber Monday.

Are you ready for one more special day before the end-of-year biggies? I'm talking about today, Giving Tuesday.

Giving Tuesday, a post-Thanksgiving fixture since 2012, is the unofficial kick-off of the annual end-of-year charitable season

Today was designed as a global day during which folks are encouraged to give back to their communities and the charitable causes they care about.

The timing fits right into the end-of-year solicitations by nonprofit organizations and the annual tax considerations of donors.

Tax cuts also cut donor numbers: Over the last seven years, the #GivingTuesday (as it's known on social media) movement has sparked donations of more than $1 billion in the United States alone.

But the Tax Cuts and Jobs Act (TCJA) has thrown a wrench into the philanthropic works.

The new tax law dramatically hiked the standard deduction amounts, meaning fewer taxpayers now itemized.

Since charitable donations can be deducted only when you fill out a Schedule A with your Form 1040, that's led to a drop in the overall number of donors. 

Nonprofits are hoping that today will help them get new donors and lure back some of those previous givers.

Fewer donors, more dollars: There is, however, a TCJA silver lining for nonprofits.

The tax law also made it more tax beneficial for wealthy philanthropists, so charities aren't suffering when it comes to overall money collected.

In fact, total dollars donated hit an all-time high at a time when the share of Americans who make donations is falling, according to studies by various charitable giving tracking studies.

That's an intriguing situation, since data compiled (and tweeted) by University of California Berkeley economist and wealth tax advocate Gabriel Zucman found that the rich are barely giving any of their fortune away in any given (but not giving) year.

Still, nonprofits like to a see a deep and wide river of giving. So any help that Giving Tuesday can provide in getting more people involved in a variety of good causes is welcome.

Supercharging your generosity: So what can you and I do to help on Giving Tuesday 2019?

Fidelity Charitable, the investment firm's charitable gift fund, has three checklists that it says can help you supercharge your charitable impact in as little as 5-to-15 minutes.

Suggestions include:

• Focusing on where you want help by reflecting on what inspires you and what issues bother you most.
• Following a nonprofit organization that you care about on social media and sharing one of their posts.
• Searching a charity's website or social media pages for a wish list of the donation items considered most critical.
• Contacting an organization to learn more about its volunteer opportunities.
• Signing up for a charity walk or race and sharing share it, and your participation on event day, on social media.
• Checking your employer's benefits package to find any available charitable matching programs.
• Sharing something you learned about a cause or an organization with family and friends and inviting them to join you in a shared giving tradition, such as a volunteer day or pooling funds for a shared donation.

Financially, you can:

• Set a target budget for charitable giving and break it down by each organization you plan to support.
• Make an unrestricted donation to one of your favorite charities.
• Set up automatic payments to fund your giving, for example, automatic transfers to a separate bank account, donor-advised fund or your favorite charity.
• Contact your financial advisor to see if there are strategies you should consider for charitable giving this year, such as bunching, donating stock or establishing a donor advised fund. (Shameless plug: see these and other actions to take in my December Tax Moves post.)

IRS OK key to safe, deductible donations: And of course, you want to make sure your chosen charity is nice, not naughty.

Check out any charity you plan to support on Candid (the newly merged GuideStar and Foundation Center), Charity Navigator and the Internal Revenue Service's online qualified charity search tool online Tax Exempt Organization Search tool.

Getting the IRS' OK is key of you plan to claim your charitable gifts as itemized deductions. You can find more about the potential tax benefit of giving in my charitable donation tax deduction rules post from last year's Giving Tuesday.

Even if you don't want or need the tax break, you want to ensure that your nonprofit of choice is following all the rules, tax and otherwise. A legitimate and well-run charity will do the most good for the causes you support.

You also might find these items of interest:

• Boxing Day tips for cool and charitable cats
• Uncommon charitable gifts still provide donors the typical tax deduction
• Spring — or holiday — cleaning could help cut your tax bill when you properly value donated goods

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