Tax Reform & Charitable GivingWith the new tax reform, many are wondering how they will be impacted. For many, it creates an opportunity in the form of increased disposable income. Here are a few of the changes that may impact you:
- Income Tax brackets: In 2018, those who file single, married jointly, separately, or as head of household will see a new tax bracket. The seven tax brackets will remain, but rates will be lower for most brackets: 10, 12, 22, 24, 32, 35, and 37 percent. Under the new law, most taxpayers will see their tax rate decrease – for example, a married couple with a combined income of $150,000 will drop from a 25 percent tax rate to 22 percent under the new law.
- Standard Deduction: The standard deduction is nearly doubled under the reform to $12,000 for single filers, $18,000 for heads of household, and $24,000 for joint filers.
- Personal Exemption: The personal exemption is repealed under the new tax law.
- Itemized Deductions: Charitable deductions remain, but itemized deductions may look a little different this year. There is a cap on the mortgage interest deduction and other changes.
- Charitable Contributions for Cash Gifts: Under the reform, the limitation for donations by cash, check, or credit card is 60 percent of your gross income, up from 50 percent.
What Stayed The Same:
- Charitable Deductions: You may still deduct your charitable contributions when you itemize your taxes.
- Long-Term Capital Gains and Dividends: There is no change on the tax rates, they remain at 0, 15, and 20 percent, depending on your tax bracket.
- Charitable Contributions of Appreciated Property: The limitation on charitable gifts of long-term appreciated property to public charities will be the same, 30 percent of your adjusted gross income. Any excess can be carried over for up to five additional years.
These changes in the tax law may create a financial opportunity for you to give to Three Rivers College in a way meaningful to you. In addition to annual gifts, below are a couple of ways you can do this:
- Give from your IRA (if you are 70.5 or older). This is not considered taxable income, but helps you fulfill your required minimum distribution.
- When drafting your will, name the Three Rivers Endowment Trust as a beneficiary of retirement plan accounts. If distributed to heirs, assets in qualified retirement plan accounts are subject to income tax, but if Three Rivers Endowment Trust is the beneficiary, the gift passes to us free of taxes.
Start the Conversation
- An investment in Three Rivers College is an investment in the future. There are many ways that you can give that make brighter futures for our students but also offer you benefits. Consult with your tax or financial advisors to find the best strategy for your individual situation.
- For more information regarding needs and opportunities at Three Rivers, contact Michelle Reynolds, 573-840-9077 or firstname.lastname@example.org.
- For professional advisors, feel free to contact us for more information or assistance as you work to help your clients achieve their charitable plans. Our information is as follows:
Legal Name: Three Rivers Endowment Trust
Tax ID Number: #27-1887511
Address: 2080 Three Rivers Blvd., Poplar Bluff, MO 63901
The information on this website is not intended as legal or tax advice. For such advice, please consult an attorney or tax advisor. Any figures cited in examples are subject to change and for hypothetical purposes only. References to estate and income taxes include federal taxes only; state income/estate taxes and law will vary.