No, You Really Can't Get a Deduction for that Artwork You Donated to Charity

Some arts organizations misleadingly suggests that artists can get tax deductions for works they donate to charity. Here’s why that’s unfortunately not the case.

Last month, I wrote about how the tax law passed in 2017 — officially the Tax Cuts and Jobs Act (TCJA) — will soon bring big changes to charitable giving.

Based on reader feedback, I now want to address a longstanding practice regarding charitable giving in the art world that needs to end. …read more…

How the New Tax Cuts and Jobs Act Impacts the Art World

(graphic Hrag Vartanian/Hyperallergic, original image via Credit Score Blog)

Under the new tax laws, the wealthiest will have even more incentive to make charitable donations, while the average middle class family will have less.

The tax law changes passed in 2017, officially the Tax Cuts and Jobs Act (TCJA), represent the largest change to the tax code in 30 years. With so many changes, Hyperallergic wants to address — in this and future articles — how the legislation will affect the art world.

One area in particular that impacts almost everyone in the art world — from artists, to collectors and patrons, to cultural institutions — is charitable giving.

read more here…

Charitable Deductions for You, Me and Warren Buffet

Here’s a fact that may surprise you: lower income people give far more to charity than people in the upper income brackets. And yet the laws for charitable giving bend over backwards to accommodate high-income charitable givers, and often don’t allow low income people to get a deduction at all.

The reason is that only people who itemize their deductions get to claim charitable deductions, and lower income households usually don’t itemize. Here’s a quick primer:

Every person filing taxes gets a personal exemption of $4050 for every taxpayer and dependant claimed on her return. In English, this means that everybody’s first  $4050 of income is automatically tax-free. If you are married with three kids, you only pay tax on any money you make over $20,250 ($4050 personal exemption x 5 people).That’s true for you, me, and Warren Buffett.  read more...