Planned Giving

Your act of generosity, our longevity

With planned giving, you can provide long-lasting support for Boys & Girls Clubs of South Puget Sound while enjoying financial benefits for yourself.

Text Resize
Print
Email
Subsribe to RSS Feed

Tuesday February 19, 2019

Washington News

Washington Hotline

Top Five TCJA Changes that Impact Taxpayers

The Tax Cuts and Jobs Act (TCJA) was the most comprehensive revision of income taxes in the last three decades. As taxpayers and their advisors start to prepare their 2018 income tax returns, it is helpful to consider the personal impact of the top five TCJA changes.

The top five changes for most taxpayers will be the increased standard deduction, home mortgage interest rules, state and local tax deductions, the increased child tax credit and the repeal of miscellaneous deductions.
  1. Standard Deduction – The TCJA replaced the personal and dependent exemption deductions with a much larger standard deduction. The standard deduction for married couples filing joint returns nearly doubled from $12,700 in 2017 to $24,000 in 2018. The standard deduction for single filers increased from $6,350 to $12,000. The near-doubling of the standard deduction will simplify tax filing for many Americans. An estimated 90% of taxpayers will use the standard deduction for 2018 returns. The number of itemizers is likely to decline from 30% in 2017 to 10% in 2018.

  2. Home Mortgage Interest – If you itemize, your home mortgage interest is generally deductible. The loan limits for mortgages after December 15, 2017 changed from the previous $1 million to $750,000. There are exceptions for homes under contract by December 15, 2017 with closings by March 31, 2018 and for refinancing where the new loan balance is equal to or less than the previous amount. Most home equity loan's interest are no longer deductible.

  3. State and Local Taxes (SALT) – The 2017 unlimited deduction for SALT is capped to a maximum amount of $10,000 in 2018. You may combine property taxes on a U.S. residence with state and local income taxes for a total deduction of $10,000. You also could elect to deduct your state sales tax rather than your state and local income tax. Many upper-income individuals from high-tax states will pay larger federal tax for 2018 due to the $10,000 SALT limit.

  4. Child Tax Credit – Families will benefit from a $2,000 tax credit per dependent child. With several child credits and the increased standard deductions for married couples of $24,000, some families will pay no federal income tax. Some families may qualify for up to a $1,400 refund on each child's tax credit.

  5. Miscellaneous Deductions – In 2017, your miscellaneous deductions for investment expenses, unreimbursed employee business expenses, tax preparation fees and other fees could be deducted if they were over 2% of your adjusted gross income. The miscellaneous deductions were repealed by the TCJA.

Editor's Note: Many of the 90% of taxpayers who take the standard deduction are over age 70½. Most of these taxpayers have a traditional IRA or other qualified retirement plan and must take a taxable required minimum distribution (RMD). Those seniors who support charitable organizations should make their gifts through an IRA rollover. The IRS calls this IRA rollover a qualified charitable distribution (QCD). It is a transfer directly from the IRA custodian to a public charity and fulfills part or all of the IRA owner's RMD.

Individuals or couples over 70½ who make charitable gifts through a QCD will reduce their taxable income because part or all of the RMD was transferred to charity and is not taxable to the donor. If taxpayers reduce income through a QCD and take the larger standard deduction, many may pay little or no federal income tax.

Published January 25, 2019
Print
Email
Subsribe to RSS Feed

Previous Articles

IRS Free File Now Available

IRS Will Pay Tax Refunds During Shutdown

IRS Top Tax Scams

Preparing for Filing Your 2018 Tax Returns

IRS Publishes 2019 Business, Moving, Medical and Charitable Mileage Rates

scriptsknown

Gift Options

Donor Stories

Learn how others have made an impact through their acts of giving to our organization and others. Explore the many benefits of charitable gift planning.

more

How to Give

Learn how to make a gift that provides tax benefits and even life income.

more

What to Give

Find out what type of assets make the best planned gifts. Learn about gifts of cash, securities and property.

more

Planned Gifts Calculator

View a presentation that shows the benefits of a planned gift based on your property and goals.

more

News

Personal Planner

Bequests to Your Favorite Charity Bequests to charity are the most popular type of planned gift. A donor may retain assets during life and then leave a...

more

Finance News

Hewlett-Packard Continues Resurgence Treasuries Rise on Mixed Economic Data Interest Rates Stay Low

Savvy Living

Personal Tech Products Designed Specifically for Seniors. Can you recommend any tablets, smartphones or computers that are specifically designed for seniors? I would like to buy...

more

Washington News

IRS End-of-Year Tax Tips

In IR-2014-110, the IRS offered tax tips for end-of-year charitable giving. 1. Household or Clothing Gifts ? These items must be in good used condition or better..

more

For Advisor

Advisor Resources

We have a complete tax update service for CPAs, attorneys, CLUs, CFPs, ChFCs, trust officers and other professional friends.

more

Deduction Calculator

The GiftLaw Calculator is a planned gifts calculator for professionals that follows the IRS format

more

Private Letter Ruling

Estate Distributes to Foundation without Self-Dealing

Decedent formed Company and subsequently formed Irrevocable Trust...

more

Washington News

IRS End-of-Year Tax Tips

In IR-2014-110, the IRS offered tax tips for end-of-year charitable giving. 1. Household or Clothing Gifts ? These items must be in good used condition or better.

more

GiftLaw Pro

Charitable Tax Reference

GiftLaw Pro is a complete charitable giving and tax information service inside the GiftLaw website...

more

Case of the Week

Living on the Edge, Part 4

Rhea Jones, 75, lives in a beautiful coastal town in northern California. Rhea?s home occupies three...

more

Article of the Month

Gifts of Pass-Through Business Interests

A charitable gift of a business interest can make a wonderful gift to charity. At the same time,...

more