2018 Tax Law Changes

2018 Tax Law & Charitable Gifts

Under the 2018 tax law, the standard deduction threshold increased to $12,000 for an individual, $24,000 for a couple. You can:

Pick a target year to itemize and bundle your charitable gifts to exceed the threshold by doubling deductions in one year.

Create a donor advised fund with a large charitable contribution that exceeds the threshold.

The limitation on deductions for charitable contributions increased from 50% to 60% of adjusted gross income. If you can afford to forego the income, help grow your parish, school, ministries or the diocese.

The estate and gift tax exemption doubled to $11.2 million per person, $22.4 million for a couple. If you have a high net worth and have provided for your heirs, your assets can help sustain your parish, school, ministries or the diocese.

Give assets excluded from taxable income

IRA Distributions: A distribution given directly from your IRA to the parish is even more valuable if you no longer itemize deductions. Donations up to $100,000 are excluded from taxable income. You must be at least 70 ½ and have a regular (not Roth) IRA.

Gifts of Grain or Livestock: If you farm on a cash basis, you can provide significant support for the Church by donating your grain or livestock. The gift is excluded from income. Production costs are eligible for deduction, if your tax situation allows.

Give appreciated assets to reduce capital gains & increase deductions

Securities: An outright gift of appreciated securities will not incur federal capital gains, plus the fair market value is eligible for deduction.  The securities must have been owned for more than a year and appreciated in value.

Real Estate or paid up Life Insurance: A gift that can be sold might allow you to make a larger gift than you ever supposed.

Give appreciated assets and receive income

Charitable Gift Annuities or Charitable Remainder Trusts: If funded with appreciated assets there is no up-front capital gains tax for you, but it is eligible for a charitable deduction and pays income for your lifetime. The remainder becomes a legacy gift for your parish.

Please consult with your own attorney and other professional advisors regarding your personal tax and financial situation.