Tax reform has been signed. As of Dec. 22, 2017, the Tax Cuts and Jobs Act has been signed into law by the president. While the changes won’t be effective until 2018, it might be advantageous for you to look at tax-saving strategies that are still applicable for your 2017 philanthropic giving.
A tax-saving gift – either outright or deferred – may be particularly appealing if:
- You own property that has grown substantially in value but produces only a small income.
- You own a life insurance policy that is no longer needed for the security of your family.
- You own a business interest.
- You will have an unusually high income this year.
- You want to gain a good, favorably taxed source of income for your life and/or the life of another.
A year-end charitable gift can make sense in your financial planning because it can help you support the causes you care most about while maximizing tax savings. However, there are several factors to keep in mind:
Timeliness – The date of delivery is the key to whether a gift will be tax deductible in 2017. A check is considered delivered on the date it is postmarked – even as late as December 31, 2017. Gifts of stock or mutual fund shares, which may take time to transfer, are complete when the shares reach the intended beneficiary’s account.
Type of gift property – If possible, give capital gains property that has grown in value and that you have held more than one year. Your profit escapes tax, and your deduction will be the property’s full fair market value. If you have capital-loss stock, sell that first and donate the proceeds. Your loss can offset some of your capital gains, and you’ll get a charitable deduction as well.
Deduction ceilings – Every dollar you give to charity before the end of the year will be tax deductible. The most you can deduct for 2017 is 50% of your adjusted gross income (AGI). Gifts of securities can be deducted up to 30% of AGI. Excess deductions can be carried over and deducted in future years.
To make the most of your year-end charitable giving, always consult with your CPA, attorney or other advisor to understand the impact on your taxes and estate. For more information about planned giving and to learn how your gift to the Treasure Coast Hospice Foundation can make a difference to patients and families facing serious illness in our community, call 772.403.4500.