Tax reform’s effect on charities, property tax deductions

With the new GOP tax plan set to roll out soon, new implications are coming to light, including the possibility that charities may see a reduction in donations.

The theory from some is that fewer people will be itemizing, and instead using the standard deduction.

And with charitable donations being an itemized deduction, that could foreseeably eliminate the appeal of donating, or could cause some to reduce their usual donations.

"So some people might say well i used to given a thousand dollars to my favorite charity, and i got a tax deduction so it only cost me, whatever the number is, $700," says financial advisor with CFP Bruce Robson.  "So now maybe I just give $700.  That's the thinking that might lead to a reduction in charitable donations."

On the flip side, people could ask to donate more to get a higher deduction on their 2017 returns.  The tax plan has called property taxes into question as well.

With folks looking to itemize as much as possible before 2018, some have decided to pay their 2018 property taxes, something the IRS is warning may or may not be deductible.

Financial advisors say Maryland tax payers should get the deduction due to its property tax pay period.

"So last summer our bills came out to cover July 1, 2017 to June 30, 2018.  If somebody makes those before the end of the year, they definitely will be deductible, they've already been assessed them, frankly, it's a no brainer to go ahead and do that," says Gobson.

Experts say that because Delaware operates on a fiscal year schedule like Maryland, they should be able to pay their property taxes early and get a deduction.  They add every individual's tax situation may be different.