“Clients often misunderstand the deduction limits since gifts are limited to either 50%, 30% or 20% of AGI depending on the type of assets given and the type of charity,” said Clay Stevens, director of strategic planning at Aspiriant. “That doesn’t mean that the deduction is limited by that amount. It’s just the amount that one can deduct in any given year. To the extent that one gives more than that amount, the excess will carry forward for up to five years and be used in future years.”
Time is admittedly running out to make this decision, but it isn’t gone yet. “The benefit of waiting is that a tax projection may reveal that the deduction will be more valuable in the following year,” Foss said.
“There’s a lot of uncertainty regarding what the new tax legislation will look like [but] it is safe to assume that wealthy individuals will be subjected to higher tax rates in 2022,” Benjamin said. “Charitable contributions may be more valuable if made in 2022 as opposed to the end of 2021.”