Making a Difference

The New Tax Law and Charitable Giving

The Tax Cuts and Jobs Act signed by President Trump cuts tax rates. How those tax cuts play out, however, depends on family size, available deductions, and income. Here are the most notable considerations that will affect personal planning as the bill takes effect in 2018.

  • The standard deduction increases substantially. Fewer people will itemize their taxes, and taxpayers using the new standard deduction will enjoy a deduction that is equal to or greater than deductions they would be eligible for if they itemized. The result? Taxpayers can still realize charitable giving goals and some donors will have even more discretionary funds available for planning.
  • Gifts of retirement assets (including charitable distributions from an IRA for those age 70½ or over) and life-income gifts (charitable gift annuities and charitable remainder trusts) remain as particularly attractive charitable giving options.
  • The 3.8% net investment income tax remains in effect for high-income taxpayers, which means strategic charitable giving continues to be important for some taxpayers.
  • The alternative minimum tax (AMT) remains, but with a higher exclusion amount.
  • Corporate income tax rates are significantly reduced and certain pass-through corporations will also enjoy a tax reduction.

Please contact us to let us know how we might help you and your advisors explore charitable strategies under the new law. Your continued support for our mission makes a lasting difference for everyone we serve, and it’s our privilege to help you shape a personal philanthropic legacy.