The campaign expects to be $2 million richer by the end of the year because of changes in the tax law and its informational efforts. "We are encouraging our donors to prepay their gifts to our recently concluded campaign for 1987, and also to prepay gifts for future campaigns in 1988, 1989 and 1990."
Making charitable contributions this year instead of next isn't the only opportunity that will be missed by taxpayers if they don't act before the new year.
"The just-passed tax reform act of 1986 creates opportunities to reduce tax liability that will not be available after the first of the year," said Al Kaufman, partner-in-charge of the tax division at the Philadelphia office of Arthur Andersen & Co.
Kaufman's year-end strategies include:
* Accelerating sales taxes. A big-ticket purchase that carries a heavy sales tax, such as an automobile or a major home appliance, should be bought before the end of the year. The sales tax can be deducted in 1986, but not in 1987 or thereafter.
* Refinancing your home and paying off consumer debt. After 1986, the deduction for consumer interest on credit cards and charge accounts is being phased out, but within certain limits taxpayers still will be able to deduct in full the interest on home mortgage payments. By refinancing their home and and paying off other debts, taxpayers can shift debt from non-deductible status to deductible status.
* Accelerating charitable contributions. Greater tax benefits may be gained
from charitable contributions made in 1986 because tax rates in 1987 and 1988 are lower. A regular contributor to a church, school, hospital or other not- for-profit organization may wish to prepay contributions in 1986 when tax rates are higher. The higher the tax rate, the more the deduction is worth.
