Smart Ways to Take Advantage of 2018's Tax Reform Changes

The 2018 tax reform changes may dramatically change your financial planning. Lower rates generally mean you will have more disposable income, but other elements of the tax laws may affect you if you itemize your taxes, as an estimated one-third of American households do.

Talk With Your Tax Professional

You may look at the changes and wonder how you can donate; the increase in the standard deduction may provide less incentive to itemize philanthropic gifts. Please consult with your tax or financial advisors to determine the best strategies for you. There are many ways to still make a meaningful difference to the individuals that Wheeler serves, while enjoying financial benefits for yourself.

Donate appreciated stock or real estate:

The markets are at or near all-time highs. Is your portfolio balanced, or do you have some stocks that have appreciated a great deal and may result in high capital gains if sold? One option can be to donate appreciated stock to Wheeler and eliminate capital gains tax. Real estate is similar; many markets have gained tremendous value recently.

Bundle your giving strategically:

The increase in the standard deduction can be used to your advantage. Have you considered bundling several years of giving to Wheeler into one gift? A larger donation that exceeds the standard deduction may help you make a greater impact with your giving and provides tax benefits now. You can then take advantage of the standard deduction in the next few years.

Give directly from your IRA (if age 70 ½ or older):

Do you have an annual required minimum distribution? Giving to Wheeler directly from that distribution helps you fulfill your requirements, is not considered taxable income, and is unaffected by the change in deductions.

Name Wheeler as a beneficiary of retirement plans:

Assets left in retirement accounts are often unattractive tax liabilities, as they are generally taxable when distributed to a loved one. They are tax-free when donated; have you considered naming Wheeler as a beneficiary?

Studies show donors do not give solely for tax benefits. However, the 2018 tax reforms will very likely affect you. With your financial advisors, now is the time to plan ahead!

Back to Top