There is still time to implement some great tax planning ideas for 2019. While many planning tools remain similar to last year, the IRS has issued new guidance that could affect your tax situation.

Idea 1: Charitable Contributions

• Consider a Donor Advised Fund (DAF). If you want to take advantage of itemized deductions, but do not want all the money to go to the charity in a single year, a DAF is the perfect vehicle to accomplish this goal.
• Consider a Qualified Charitable Distribution (QCD). Instead of taking a distribution from an Individual Retirement Account (IRA), taxpayers age 70 ½ and over may directly transfer up to $100,000 to public charities. The income tax benefit is not a charitable deduction, but rather, the exclusion of the donation amount from your income.
• Charitable contributions in exchange for state or local tax credits are now limited. The IRS issued final regulations that require taxpayers to reduce their Federal charitable deduction by state or local tax credits received in return for their contribution. For PA residents, this has a direct impact on charitable contributions made through Pennsylvania’s Educational Improvement Tax Credit and Opportunity Scholarship Tax Credit programs.

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