The Tax Cuts and Jobs Act (TCJA) passed on December 20, 2017 was the biggest tax bill since the Tax Reform Act of 1986. As a CPA, this new act has greatly impacted my profession. One area of impact is on form Schedule A, where itemized deductions are reported. State, Local and Real Estate Taxes have been capped at $10,000 and miscellaneous deductions were taken away. Couple those changes with an increase in the standard deduction, and what does that all mean? It means there are many taxpayers that will no longer itemize.
Some of my generous clients that give a lot to charity also like to take advantage of the federal tax deductions that come along with that. And the fact of the matter is that in some cases, if not many, those deductions are no longer going to be available under the TCJA. This is, of course, on a case-by-case basis, and taxpayers may still in fact itemize if they also have mortgage interest, medical expenses above the threshold, and large charitable giving.
However, even if a taxpayer can no longer itemize, there are still some nice advantages to giving. The main reason for giving hasn’t changed. We all have our causes and we all like to support those causes however we can. We can give of our time or we can give from our financial resources. My personal experience is that both options are rewarding, and it’s nice to see the cause you are supporting flourish and to see their mission at work.
One thing I’m passionate about is supporting my alma mater, Oakland City University, so that others can have the same opportunity that I had.
Indiana tax law makes this even a little easier to do by offering the Indiana College Credit. This is a credit for contributions to eligible colleges or universities in Indiana. The credit is 50% of the contribution up to a $100 tax credit for single filers and a $200 tax credit for joint filers. The credit is also available to corporations equal to 50% of the total amount given—not to exceed 10% of the corporation’s adjusted gross income tax liability or $1,000. The credit is reported on Schedule CC-40 (State Form 20152).
I think the Indiana College Credit is a nice opportunity and certainly incentivizes supporting your favorite college or university. Oakland City University opened up many opportunities to me, and I’m happy to support them and help to provide opportunities for others.