Tax Cuts and Jobs Act of 2017
Will the New “Tax Cuts and Jobs Act of 2017”
Affect Your Charitable Giving?
The many changes to the tax laws under the new act will affect individuals, local businesses and corporations in very different ways. Since 1913, when Grand View Hospital was founded as the first hospital in Bucks County, support from our community has sustained our mission. We believe that our donors have a higher motivation to their giving than just the tax deduction.
In December 2017, the Centers for Medicare and Medicaid Services (CMS) released their ratings for hospitals’ overall quality on the Hospital Compare website. Grand View received a “5-Star Rating,” one of only seven hospitals in the region. We are committed to a culture of quality care and patient satisfaction.
Our leadership has guided Grand View to offer new services like Urgent Care, now open in three locations, and a new Ambulatory Surgical Center opening in May 2018 at the Harleysville Outpatient Center. We are fortunate to have the insights of nearly 30 community leaders who serve as trustees and 500 volunteers who work throughout the hospital. We hope you will continue to find many worthy reasons to maintain your giving to Grand View, while considering important tax strategies that could work for you.
Here are 9 strategies to think about under the new tax rules in 2018 that will also sustain charitable gifts!
- If you have a lower tax bill, as most people will, there may be room in your budget to make a charitable gift, regardless of its deductibility.
- Both corporations and small businesses will see a significant reduction in their corporate tax rate, potentially leaving room for expanded corporate support of non-profit organizations like Grand View.
- Partnerships, S corporations, LLCs, and sole proprietorships will see more favorable treatment of “pass through” income, increasing owner profitability.
- When you itemize your deductions, you may now deduct as much as 60% of your Adjusted Gross Income for charitable gifts, up from 50%.
- If you use a donor advised fund, or are thinking about starting one, you could front load your contributions to the fund in order to exceed the standard deduction threshold of $12,000 for an individual or $24,000 for a married couple.
- Charitable Gift Annuities provide a significant up-front charitable deduction in the year in which you create the annuity, possibly exceeding the standard deduction.
- Gifts of appreciated securities continue to have the benefit of avoiding capital gains tax of 15% or 20%. They work especially well to fund gift annuities or other life-income gifts.
- The IRA Rollover provision, made permanent in 2016, has not changed. Those who are 70 ½ or older can make tax-free gifts of up to $100,000 per year directly from their IRA to qualifying charities, like Grand View Health Foundation. Such a gift satisfies the Required Minimum Distribution (RMD) but is not taxed as income to the donor.
- It is estimated that 99.9% of estates will now pass free of Federal estate taxes, given the new thresholds of $11.2 million for individuals and $22.4 million for married couples. Talk to your financial advisor to maximize benefits to your heirs, and consider a bequest to the Grand View Health Foundation.
Your specific situation will determine how best to use any of these strategies. I encourage you to contact your financial advisor for clarification. You are welcome to contact the Grand View Health Foundation office with your questions.
David L. Alderfer
Director of Development
Grand View Health Foundation