By Raymond Hendrix, Synod Treasurer

Contributions to a Church under the Tax Cuts Act.

“An Act to Provide for Reconciliation Pursuant to Titles II and V of the Concurrent Resolution on the Budget for Fiscal Year 2018” was signed into law in December 2017. What a name! With a name like that, I don’t think the act will be simple. The act is being referred to as “The Tax Cuts and Jobs Act.”

Changes to charitable contributions are as follows:

  1. The contemporaneous written acknowledgement requirement is reinstated; therefore, you must have a receipt for any contribution of $250 or more.
  2. The percent of AGI limitation for charitable deductions has been increased from 50% to 60%.
  3. No deduction is allowed for a contribution in which the taxpayer receives the right to purchase tickets.

The increase in the standard deduction could have an affect on church giving. The standard deduction has almost doubled from the prior year. For a single person, the standard deduction increased from $6,350 to $12,000 and for a married couple, from $12,700 to $24,000. A taxpayer is still allowed to choose between itemizing deductions or taking the standard deduction.

A married couple with itemized deductions of $17,500 in both 2017 and 2018 would itemize their deductions on their 2017 tax return and take the standard deduction on their 2018 tax return. Another benefit of the standard deduction is not having to keep track of receipts to support the itemized deductions.

Since there is no tax benefit to itemizing deductions in the above example, there has been some talk that the taxpayer may cut or reduce donations to the church. I pray that we give to the church out of our love for Christ and not for the tax benefit.

Remember that Christ told Peter, “If you love me, feed my sheep.” Christ did not say to Peter, “For a tax deduction, feed my sheep.”

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