Paule, Camazine & Blumenthal P.C. issued the following announcement on Oct. 1.
If you are charitably inclined, you should consider how the “Tax Cuts and Jobs Act” of 2017 might impact your giving. While tax benefits are probably not the driving force for your charitable gifts, you should understand how the new tax law changes will affect you so you can continue to make gifts to the charities that matter to you.
Because the standard deduction has now increased, the Joint Committee on Taxation estimates that 95% of taxpayers will no longer itemize deductions on their federal income tax returns, which will reduce charitable gifts by an estimated $14 billion annually. If you plan to take the standard deduction, there are options for you to continue to support your favorite charitable organizations while receiving tax benefits.
- Frontload giving.
2. Donate highly appreciated assets.
Gifting highly appreciated assets held for more than one year, such as publicly traded stock, to charity will save you from paying capital gains tax. In addition to avoiding capital gains tax, if you opt to itemize your income tax deductions, you will receive a tax deduction for the full value of the asset.
3. Use your IRA for charitable giving.
If you are over age 70 1/2, consider diverting your Required Minimum Distributions (RMDs) to one or more charities. This will reduce your taxable income. You might also consider naming one or more charities as beneficiaries of your individual retirement accounts. Because charities are exempt from federal income tax, this will allow them to receive the funds from your retirement account tax-free.
You can select from a wide variety of estate and tax planning options available to help you support charities. Contact an estate and tax planning attorney at Paule, Camazine & Blumenthal, P.C. to discuss how you can continue to make charitable gifts while maximizing tax benefits.
Original source can be found here.