To write off charitable contributions, taxpayers need to\nitemize their deductions instead of taking the standard deduction. <\/p>\n\n\n\n\n\n\n\n
Therefore, taxpayers can now itemize if the sum of their deductions exceed the amount they can write off by taking a standard deduction. In addition to a higher standard deduction, the IRS has also put a $10,000 cap on <\/strong>state and local tax (SALT) deductions<\/strong><\/a>. As a result of these changes, many experts predict that the number of itemizers will drop to under 10% of all tax filers.<\/p>\n\n\n\n It\u2019s hard to say what impact these changes will have on\ncharitable giving, but far fewer taxpayers will have a financial incentive to\ndonate under the new tax code. Now that a majority of the 2018 tax returns are\nin, it appears the tax reform has had a minimal change in charitable giving so\nfar. <\/p>\n\n\n\n That said, most taxpayers didn’t fully understand how the\ntax law changes were going to affect them until after filing their 2018 tax\nreturns. The big question for many charitable organizations is, how will\ncharitable giving change in 2019? Especially now that we’ve all had the\nopportunity to digest the new laws fully. <\/p>\n\n\n\n Now, this presents a fantastic opportunity for financial professionals to educate their clients, prospects, and charitable organizations. Seniors aged 70 \u00bd or older can deduct some or even ALL their philanthropic contributions if done the right way. <\/p>\n\n\n\n A required minimum distribution<\/strong><\/a> (RMD) is the amount of money the IRS requires us, at age 70 \u00bd and older, to withdraw and pay taxes on from traditional retirement accounts. Rather than clients receiving their RMD and creating a taxable event, the IRS allows for those RMDs to be redirected as a qualified charitable distribution. <\/p>\n\n\n\n This is done by having the qualified account custodian\ntransfer their RMD directly to a qualified charity. The result allows the\nclient to avoid paying taxes on the redirected RMD! The IRS does place a\n$100,000 maximum per year on this strategy.<\/p>\n\n\n\n I work with an advisor in Atlanta who has had tremendous success with this idea. He\u2019s been reaching out to local churches and other charitable organizations. His offer? To host seminars or webinars for the organization\u2019s donors to explain this tax savings strategy. <\/p>\n\n\n\n This has allowed him to get in front of large groups of potential clients at no cost to his firm. In addition to reviewing the changes to the charitable giving environment, he also capitalizes on the opportunity during his presentations to introduce how his firm and all their service offerings help families navigate retirement as efficiently and successfully as possible. What will you do to capitalize on this new tax savings strategy? <\/p>\n\n\n\nRelated: Use Fixed-Indexed Annuities to Pay for Long-Term Care Insurance with This Tax-Efficient Strategy<\/a><\/h4>\n\n\n\n
How to Help Charities Maintain or Even Increase Charitable Contributions<\/strong><\/h2>\n\n\n\n
Related: Insuring Uninsurable Minors<\/a><\/h4>\n\n\n\n
Tax Breaks for Charitable Giving: A Great Advisor Opportunity<\/h2>\n\n\n\n
Also Read: Client Relationship-Building: A Sales Skill for Advisors<\/a><\/h4>\n\n\n\n
\n\n\n\nWe’re here to help you with your clients’ tax situations – regardless of the season. Reach out to your private client group, give us a call at (800) 527-1155, or visit us at figmarketing.com<\/a> <\/h5>\n\n\n\n
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