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

Thursday March 21, 2019

Washington News

Washington Hotline

IRS Phone Calls Peak on February 19

Millions of Americans and their tax advisors are preparing their tax returns. Many have questions and will call the IRS. The peak day for IRS phone calls typically falls on the Tuesday after President's Day.

During the entire week of February 19, taxpayers may be frustrated due to long hold times on IRS phone lines. However, many taxpayers and advisors will need IRS support to complete their 2018 returns. In IR-2019-10, the Service urged taxpayers to "Avoid the Rush" by using online resources.

IRS Commissioner Chuck Rettig stated, "IRS employees are working hard to provide taxpayers the help they need. Given the high call volumes at this time of year, we encourage people to first visit our many online resources available at IRS.gov. And when it comes time to file, we continue to encourage people to use E-File or Free File to get their refunds as quickly as possible."

There are many online services on www.IRS.gov.
  1. Where's My Refund - This popular tool on IRS.gov and the IRS2Go smartphone app will be used several million times to check on refunds. The Service's goal is to issue refunds within 21 days from receipt of a tax return. The website and app enable taxpayers to track refunds. Refunds that include the Earned Income Tax Credit (EITC) or Additional Child Tax Credit (ACTC) can be tracked after February 23. Those refunds will start to be issued on February 27, 2019.
  2. Tax Questions - IRS.gov has several tools to help answer your questions. You can use the Interactive Tax Assistant, read the Tax Topics, check the Frequently Asked Questions or view the Tax Trails interactive tool.
  3. IRS Free File - IRS.gov offers free tax software to complete your return. Free File is accessed on www.IRS.gov. The "Help Me" tool may be useful to select the best free commercial tax program for your situation. Just use "Help Me" and enter your age, income and state to view software options. After you select a software program, you will use that company's website to complete your taxes. Individuals or families with incomes under $66,000 may use one or more of the Free File programs. Active duty military personnel with incomes under $66,000 have at least 10 available programs.
  4. Volunteer Income Tax Assistance (VITA) - Check the locations for VITA services on IRS.gov. Assistance is generally available for taxpayers with incomes under $55,000. Use the VITA locator tool to find a site near you.
  5. Tax Counseling for the Elderly (TCE) - The TCE program is generally available for taxpayers over the age of 60. TCE staff have expertise on retirement plans, required minimum distributions and similar issues of interest to seniors.

SALT Summit at the White House


On February 12, New York Governor Andrew Cuomo, President Trump and Director of the National Economic Council Lawrence Kudlow met at the White House. Governor Cuomo has been leading the opposition to the $10,000 deduction limit on state and local taxes (SALT).

On February 6, Trump stated he may consider a change on the SALT cap. However, on February 7, Senate Finance Committee Chairman Chuck Grassley (R-IA) indicated he was not willing to change the SALT cap.

After the White House meeting, Cuomo stated, "The President previously said that he was open to a change. He suggested that he was open to a change here also, because he understands: you hurt New York, you hurt California, you're hurting the economic engines of the nation."

On February 11, 2019, Sen. Bob Menendez (D-NJ) and Rep. Bill Pascrell (D-NJ) introduced a bipartisan bill to repeal the SALT deduction cap. Pascrell observed that 37% of taxpayers in his New Jersey district claimed an average SALT deduction of $18,668 in 2017. That deduction will be limited to $10,000 for their 2018 tax returns.

Editor's Note: Both New York and New Jersey attempted to create a charitable gift credit to offset the SALT cap. In proposed regulations published by Treasury Secretary Steven Mnuchin, the charitable credit (if over 15%) is deemed a "quid pro quo" and reduces the federal charitable deduction. In essence, it is unlikely that the charitable credit (SALT substitute) plans will be effective. The Treasury has not yet published the final regulations on the SALT charitable credit plans. Tax preparers hope the final regulations on state tax credits for charitable gifts are published before April 15.

Request for 80% Withholding Safe Harbor


On February 12, House Ways and Means Oversight Subcommittee Chairman John Lewis (D-GA) and Subcommittee Member Judy Chu (D-CA) sent a request to Treasury Secretary Steven Mnuchin to create an 80% withholding safe harbor for 2018 taxes.

With the $10,000 SALT limit and other changes in the Tax Cuts and Jobs Act, it is estimated that 15% to 18% of taxpayers will pay a larger 2018 tax bill. Because taxes are complicated, many have underwithheld.

A July 2018 study by the General Accounting Office (GAO) predicted that 21% of taxpayers have underwithheld this year. Under previous tax withholding rules, if a taxpayer withheld less than 90% of the tax bill, he or she may owe both taxes and penalty.

Because Treasury recognized that many taxpayers have underwithheld this year, the previous 90% withholding safe harbor has been lowered to 85%. Lewis and Chu claim the IRS withholding tables were not accurate and are partly responsible for the underwithholding.

They state, "Many taxpayers relied on the federal tax withholding tables prepared by the Department of Treasury (Treasury) and the Internal Revenue Service (IRS) following the enactment of the Tax Cuts and Jobs Act (TCJA). As you know, when Treasury and the IRS released these tax withholding tables in 2018, the tables did not fully factor in the TCJA's reduction in itemized deductions and the TCJA's removal of personal exemptions. As a result, taxpayers likely had less tax withheld in 2018 than in prior years."

Lewis and Chu ask the Treasury to reduce the safe harbor by an additional 5% to 80% for 2018. If this change is accepted by Treasury, a taxpayer who has withheld 80% or more must pay the additional tax, but will not be subject to an added penalty amount.

Applicable Federal Rate of 3.2% for March -- Rev. Rul. 2019-7; 2019-12 IRB 1 (15 Feb 2018)


The IRS has announced the Applicable Federal Rate (AFR) for March of 2019. The AFR under Section 7520 for the month of March is 3.2%. The rates for February of 3.2% or January of 3.4% also may be used. The highest AFR is beneficial for charitable deductions of remainder interests. The lowest AFR is best for lead trusts and life estate reserved agreements. With a gift annuity, if the annuitant desires greater tax-free payments the lowest AFR is preferable. During 2019, pooled income funds in existence less than three tax years must use a 2.2% deemed rate of return.

Published February 15, 2019
Print
Email
Subsribe to RSS Feed

Previous Articles

IRS Cautions - Avoid "Ghost" Tax Preparers

IRS Faces Five Million Unopened Letters

Top Five TCJA Changes that Impact Taxpayers

IRS Free File Now Available

IRS Will Pay Tax Refunds During Shutdown

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