New federal tax code could cause slumping charitable donations this season

(FOX 9) - It’s the season of giving, but things aren’t exactly merry and bright for the Twin Cities Salvation Army.

The organization is hundreds of thousands of dollars short of their Christmas fundraising goal, leading to a stressful time for the charity.

Currently, it is $700,000 away from its $11.9 million goal. It’s hoping to fill that gap in the last few days of December.

The charity is not sure why it is short this year, but there are concerns that changes to the federal tax code are partly to blame.

“It’s a stressful time,” said Capt. Bersabe Vera, of the Salvation Army Northern Division.

The red kettle donations are right on track this December, but donations from other sources were not.

The federal tax code changes were passed in 2017 and take effect this year.

The new tax law raises the standard deduction to $12,000 for individuals and $24,000 for couples, which means the taxpayers may choose to take that instead of itemizing their deductions.

“There are less people expected to write off,” said John Urbanski, an accountant with Fortress Investment Services.

Urbanski said it may take a little strategy and some planning ahead, but there are some ways to take advantage of the changes and still benefit from giving.

The Salvation Army, meanwhile, says it’s still hoping for a holiday miracle.

KEEP YOUR RECEIPTS

State tax law did not change, so people in Minnesota can choose the standard deduction on your federal tax return and still itemize on your state return.

So, it may still be beneficial to write some things off like donations.

Overall, you may want to sit down with a tax professional this year to talk through all of these changes and your options.