How the Tax Code Has Impacted Charitable Giving
The U.S. federal tax code underwent massive changes in 2018. Because of these changes, many folks found they weren’t getting the refund amount they normally did. In some cases, people who typically received a refund actually owed the IRS.
One concern about these changes was that charitable giving would decrease. And it did, among folks who give less than $5,000 per year. They knew they weren’t going to see a tax benefit from their contributions due to the high standard deduction, so many withheld their giving.
The good news is that many people who give significant amounts each year continued giving — and even gave more than usual in order to get full tax benefits with the new standard deduction. This is what we call “bunching” — and it’s a strategy from which more taxpayers could benefit.