Dec 26, 2018
By Rob Appel
So…we have a new tax law once again as we start to think about our 2018 taxes and our charitable giving. “The Tax Cuts and Jobs Act” that was signed into law in the last days of 2017 did not, contrary to rumors, take away the deduction for gifts made to nonprofit charities. However, the law’s effect will be much the same. The reason is the near doubling of the standard deduction that is part of the new law—and it can affect your tax return for April 2019.
Under the previously existing law, the standard deduction (the amount by which taxpayers are allowed to reduce the adjusted gross income declared on their income tax return) for 2018 would have been $6,500 for single taxpayers and married taxpayers filing separately, and $13,000 for married taxpayers filing jointly. But under the new law, the standard deduction for single taxpayers and married taxpayers filing separately will rise to $12,000 and the standard deduction for married taxpayers filing jointly will go up to $24,000!
For many U.S. taxpayers, this increase means that it will become more financially advantageous to simply take the standard deduction than to itemize deductions on their federal income taxes. And donations to churches and charities are among the deductions that taxpayers can itemize.
Of course, not everyone who donates to charity does so in order to gain a tax deduction. And that is a good thing. However, enough people are moved by this incentive (a tax deduction) that there is a predicted significant decline (in the tens of billions) expected in the total amount of charitable giving.
This brings me to this question: “What will or does your charitable giving in 2018 look like compared to previous years?”
The money will talk about what kind of people we are. Particularly, how we give money away. Charitable giving is as close as we can get to true behavior. You are not obligated to give (and lots of people don’t). Primarily because you are not directly getting in return anything you need to live: like food or transportation or housing. But consider the other luxuries we take for granted like vacations, cell phones, new cars, a summer home, excessive screened televisions, or premium cable channels.
You get nothing out of giving except the satisfaction of your charity. And so, charitable giving displays something about a person’s soul. It shows where your heart really is.
We get bombarded every day in the mail, internet, and phone with what seem to be worthy causes.
But why did so many, so-called, worthy causes start coming out of nowhere? The answer is that they
followed the money. That’s right…they knew that most of the world’s finances and givers were located in North America. So people developed what they deemed was a worthy cause, received their 501c3, and proceeded to tug at our hearts and our pockets. The problem with this is, a lot of them are not worthy causes and they are more likely a place to make a living. Who is hurt by these pseudo-charitable causes? Ministry!
Every pastor I’ve talked to recently reports a noticeable decrease in giving in their church over the past year. Whether the decline is a result of the new tax laws or not, who cares? Down is down.
Many of our small-church pastors who used to be supported through their congregations are seeking other employment outside the church to make ends meet. Other churches are looking nervously to their last offering of the month, just hoping to get all the bills paid. I’m sure there are churches that are thriving —or at least making their budget work. It is time to tell the stories of those that aren’t and see if we can all help in the process.
How’s your church faring? How’s your money and charitable giving talking back to you?
