Filing your 2018 tax return? How's it going?

Filing your 2018 tax return? How's it going?


I knew the SALT limit was coming, but I did not think about the other parts of Schedule A. I will be taking the standard deduction for the first time in a looooong time, which means the charitable contribution I made last year had no tax benefit.

Still waiting for a brokerage 1099.


I had realized that once the SALT limit was adopted in Dec 2017. We actually prepaid our property taxes in Dec 17 knowing we’d be able to itemize more that tax year and would be taking standard deduction this year.

But I wonder what will be the long term impact on amounts of charitable contributions when people who itemized before and now taking the standard deduction, realize that they effectively no longer get any deduction for them. Or even for people who will still itemize but are not getting a tax deduction on a large fraction of their charitable contributions.

For example, could people start bunching up their charitable contributions (like in donor-advised funds)? Or simply factor in the loss of tax deduction at their marginal rate and give that much less?

As someone dealing with the budget for our church, it’s a major concern. 2018 was down 1.6% in donations but my intuition is that two things were balancing there. People had a bit more money due to the tax cut but some gave less due to loss of itemizing due to SALT limit. Of course, it could all be random fluctuations but it was the first year in almost 10 that donation revenues were down so I think it’s statistically significant. I just hope it doesn’t continue to decrease once people who had not realized they would not get a tax deduction scale down their donations.


I wondered about this last year for the big non-profits that relied on public donations. I hoped people tithing wouldn’t adjust their tithe based on the tax treatment of it, but I guess it was naive for me to think churches also wouldn’t get hit hard by this.



Actually for us tithing WAS not affected too much. For multiple reasons but mainly because most people set it to a certain amount each year and don’t re-adjust. So if you think back about Jan 2018, most people had not digested all the implications of the tax reform. The surprising thing was mass offerings - outside of automatic tithing was the main thing that was down. Event proceeds were not too affected it seemed with random small ups and downs.

But, from early indications this year, of the few people who have adjusted their tithing this year, more are down than up (which is something we usually only see during recessions).

It’s a bit depressing that tax change would affect charitable giving but I kinda understand. Before you could see not only the need and the benefits of giving but you’d also had a perceived built-in efficiency. Basically you could give 15-30% (your marginal rate) more because that extra amount was more or less free money after tax. If you’re no longer getting that deduction, the perception of free money is gone. And so is the extra incentive to give generously. I’m bracing myself for the next recession which is typically when we need the donations the most too.


Are attendance rates/ congregation sizes (or other measurement of total number of donors) changing?


FWIW, I am bunching. I funded a DAF last year which included a chunk of the 2018 tithe. I need to make sure this is the best way to proceed.

I like the DAF also as it consolidates charitable giving (for the most part).


I’m expecting more people to start bunching in DAF funds too. But that only solves a part of the situation because you’re going to bunch for your main annual donations but probably not for smaller causes or one-off donations. Although if it becomes more common, options and ease of distribution from DAF funds may increase.

As far as attendance, it’s pretty hard for me to tell. I’m usually there only once a week and it seems about as full as before. Plus it varies with the seasons so it’s very hard to compare. If I had to say, I’d guess not much change and nobody’s brought that up when we looked at explaining the revenue numbers.


Yes, that is exactly what we did. Late 2017, we funded a DAF with an amount to cover all our charitable giving until we reach 70 (when a different strategy related to RMDs takes effect). In retrospect, we funded the DAF with much more than we normally would have given to charity because we didn’t want the non-deductibility to restrain our giving. So it was a win of us, and a win for the causes we support.

We’ve found that even smaller 403(b) charities are set up for grants from our DAF, or can be.


Still waiting on my 1099’s from Schwab and E*Trade. Supposed to be here on the 15th. However, I’ve done the preliminary work and I am unable to surpass the standard family deduction. I’ve itemized for a very long time. This is after quite a bit of donations too.


Same here (in case anyone is considering a DAF).


Important to note that FY18 for colleges likely includes December 2017. The real test for college giving comes in FY19.


I’ll likely not qualify for itemized deduction which would be the first in a long time. I have to do some thinking then about whether to pay off the 3% mortgage.


Would you lend someone money at 3% for however many years you have left on that mortgage? The answer should be an unconditional “no”. Your mortgage is basically free even without a deduction.


I would agree that it’s not an unconditional no, but the risk analysis that goes into paying off a mortgage is a lot different than a lot of other debt. Since the mortgages are, for the most part, nonrecourse, there’s a benefit to having the cash as opposed to a paid off house.

I’m not saying that benefit carries the day, just another thing to consider.

  1. Generally the bank can cancel your HELOC at any time, so it doesn’t serve the same objective if something bad happens.
  2. Just because you’re “creditor proof” (whatever that means, it typically only refers to your assets, not your earning potential), a creditor can still force you into bankruptcy. Even if they don’t get your assets, say goodbye to AORs, etc.
  3. You’re using your own personal financial situation to advise someone else do something. It’s not about your financial situation of being “creditor proof.” Zennuts made the statement. All I’m saying is that is something to consider.


When I said “unconditional ‘no’” I was referring to the question of whether you’d lend someone money at 3% for a long term. If you don’t want to be on the other side of this loan (and I implied that you wouldn’t want to), it means you’re probably taking advantage of the lender, so keep this in mind while “doing some thinking about whether to pay it off”. I didn’t mean to imply that it should not be paid off unconditionally.


I’d generally agree but there may be caveats and I’d say it may vary depending on the situation. For example, if your mortgage only has 7 years left and is at 3% APR. The decision to pay it off or not seems close to a 7-yr CD except penalty for breaking it would be very expensive (price of interest rate to get HELOC which are not very good rates currently). 7-yr CDs can be had for maybe a bit over 3.5%, say you get 3.75%, but you’ll get taxed on the interest so assuming 24% marginal, after-tax APY is actually 2.85%. If you don’t get to deduct mortgage interest from taxes, then that 2.85% does not compare that well against your 3% APR mortgage.

After that it’s liquidity and opportunity cost vs. feeling of having your house paid off. So to me, it’s not always that clear cut a decision. Personally, I’d still not pay it off unless I had plenty of other liquid assets because I value liquidity more than 0.15% APY but I could see other being swayed by the lure of having their house paid off.


Just got our refund today. Was simple enough return for CK to handle but processing was pretty quick (just under 2 weeks between filing and refund).


That’s awesome. I filed today and it was accepted in about 2 hours.