Ways to Maximize the Tax Implications of Charitable Donations

Since the Tax Cuts and Jobs Act was enacted in 2017, the standard deduction has risen annually, with another jump planned between 2023 and 2024. For 2023, the standard deduction is $13,850 for single filers and $27,700 for married couples filing jointly. While many people decide to take a standard deduction rather than itemize charitable gifts, there are still ways to maximize the tax advantages of your generous gift to MCEA this year.

For some, it can be worthwhile to bunch two annual donations into one year, itemize for that year and take the standard deduction in the following year. Bunching gifts like this can produce a larger combined total deduction over two years. 

MCEA has seen a sizable increase in gifts via Donor Advised Funds or DAFs. These funds accept cash, stocks, bonds and other assets, the value of which is usually tax deductible upon deposit into the DAF account. If you decide to give this way, please let us know, as many DAF checks do not identify the original donor, and we’d love to thank you. (We can also set up an automated reminder if you’d like to continue giving annually via your DAF.)

Donors over 70 ½ who make donations directly from IRA accounts do not need to itemize to see tax advantages. Making a direct qualified charitable distribution can help lower the overall tax burden by reducing taxable income. For IRA owners over 72 who must take a required minimum distribution, it can be very advantageous to rollover that distribution to a qualified nonprofit like MCEA. Ask your account trustee for more details about making gifts directly from retirement accounts.

Whether you itemize or not, we encourage you to keep records of your gifts. If you give to us as one of our monthly “sustainers” please watch your mail for a hard copy letter that summarizes your 2023 MCEA giving. And if you have need of additional gift verification for your records, please reach out to Development Director Debra deNoyelles.Thanks for your support!