News, Taxes

1 charitable deduction you can’t use anymore

As we’re gearing up for 2019’s tax season, many Americans are just starting to figure out all of the changes made by the Tax Cuts and Jobs Act and how they’ll be affected.

Fortunately for the most generous Americans, deduction for charitable contributions did not change much through tax reform. In fact, the maximum deduction actually increased as a percentage of adjusted gross income. However, there was one popular type of charitable deduction that has been eliminated, and millions of college athletic fans aren’t going to be happy.

The charitable deduction can be quite lucrative

The tax deduction for charitable contributions is one of the biggest tax breaks used by Americans. For the 2016 tax year, the most recent for which finalized data is available, more than 33 million Americans who itemized claimed a total of $221.6 billion in charitable contributions.

Taxpayers can generally deduct all donations (cash or property) to qualifying organizations. And, the limit is high – for most donations, the deduction is capped at 60 percent of adjusted gross income, or AGI.

Attention, college athletics fans

While the Tax Cuts and Jobs Act left the charitable deduction largely untouched, it did make one significant cut.

Previously, if you donated money to a college or university, and in exchange for your donation you got the right to purchase athletic tickets, the donation was 80 percent deductible. So, if you made a $1,000 donation to a university’s athletic department, you were allowed to treat $800 of that amount as a charitable deduction. Obviously, the cost of the athletic tickets themselves were never deductible, but this was still a big tax deduction for many Americans.

Read the full story at The Motley Fool. 
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