Which makes housing in general more affordable.I figure a big hit to home value due to cap on mortgage interest deduction.
Which makes housing in general more affordable.I figure a big hit to home value due to cap on mortgage interest deduction.
Perhaps the person who died would have recognized the need to keep records of such versus leaving a mess. It's the responsible thing to do.An elimination of the step-up in cost basis at death seems like an accounting nightmare for many families. How the heck are the beneficiaries supposed to know what the cost basis for something they didn't purchase?
Yes, thanks.Perhaps I am misreading what you are saying here, and I may be wrong about it, but I thought that the Medicare premiums were adjusted annually based on your income the previous year.
In other words, if you have high income this year, your Medicare premiums will be higher next year. But if your income drops the following year, your Medicare premiums will drop the year after.
It isn't a "this-was-your-income-in-2017-so-you-have-high-Medicare-premiums-for-the-rest-of-your-life" situation. Which is what I thought you were implying here.
I mention it only because it may affect your planning.
Perhaps the person who died would have recognized the need to keep records of such versus leaving a mess. It's the responsible thing to do.
Quick (hopefully non-porky) question: Does this not slam charitable contributions as a tax incentive under all sets of circumstances?
Yes, yes I know we are all charitable souls and would give as much anyway.... BUT there are some few out there that will switch that lever down to offset higher cash flow elsewhere.
And the Pease Amendment is removed against so charitable deduction is not reduced for high incomes.Per the kitces article, charitable deductions are not being eliminated. On fact, based on AGI, there is a slight increase in the amount that is deductible. Also appears documentation requirements are more more stringent:
"Limitations (And One Slight Improvement) On Charitable Deductions
While most itemized deduction changes under the TCJA proposal are “negative” and more limiting, a silver lining is that under Section 1306, the limitation that cash contributions to a public charity cannot exceed 50% of AGI (with a 5-year carryforward for unused amounts) would actually be increased to 60%-of-AGI instead (with the same 5-year period). In addition, the charitable mileage deduction limit – currently $0.14/mile – will finally be indexed for inflation going forward.
However, Section 1306 also proposes a number of “crackdowns”, including the ability to claim a charitable deduction for 80% of the cost of purchasing seating rights for college athletic events (entirely repealed), and the requirement that all charitable donations above $250 must have an accompanying contemporaneous written acknowledge will be expanded to all such charitable donations (regardless of whether the charity also maintains donation records and reports them in the organization’s own tax return)."
Another potential problem for those who currently itemize is that this could increase state income taxes because many states require you to take the standard deduction on your state return if you took it on the Federal return.
Quick (hopefully non-porky) question: Does this not slam charitable contributions as a tax incentive under all sets of circumstances?
Yes, yes I know we are all charitable souls and would give as much anyway.... BUT there are some few out there that will switch that lever down to offset higher cash flow elsewhere.
It would have us bunching up in several years worth in one year. Since we use a DAF, that works out OK. Can still add on up to $10K in property taxes, which is about two years worth for me.
Quick (hopefully non-porky) question: Does this not slam charitable contributions as a tax incentive under all sets of circumstances?
Yes, yes I know we are all charitable souls and would give as much anyway.... BUT there are some few out there that will switch that lever down to offset higher cash flow elsewhere.
The loss of the state and local tax deduction is going to hit a big chunk of the upper-middle class/lower-upper class in high income tax states with a big tax increase. ....
Kitces has chimed in - I have not read it yet but he is always insightful. Looks like some nice graphics comparing current to proposed.
https://www.kitces.com/blog/tax-cut...ail&utm_term=0_4c81298299-04646a6e33-57160561
... ...I think that for most people that the tax benefit of charitable contributions is a by-product and not the major reason why they contribute. We won't change what we contribute as a result of the change in tax benefits
YMMV but I think it is prudent to actually do some test calculations rather than try to intuit the impact as there are many moving parts.
Don't see the issue. If the new standard deduction is bigger than your itemized deductions, then taking the standard deduction is a better deal. If itemized still exceed new standard, you can still take itemized.
I think that for most people that the tax benefit of charitable contributions is a by-product and not the major reason why they contribute. We won't change what we contribute as a result of the change in tax benefits
If you have an IRA & you're up to RMD age, it's immaterial as you can contribute as part of the RMD & reduce income with it.It increases the number of people taking the standard deduction. For those people, it removes the tax incentive to contribute to charities. However, there will still be a lot of people itemizing, so those people still have the tax incentive.
Likewise, if the charitable contributions are large enough to make it worth itemizing, those people will still have the tax incentive.
I suspect some people may start batching their charity for tax reasons. If you were planning to give $10k per year for 5 years, it would make more sense to give $50k in one year instead.
If you have an IRA & you're up to RMD age, it's immaterial as you can contribute as part of the RMD & reduce income with it.
So why would you?This is true. You just can't use a DAF but have to go directly to qualified charities.
Don't understand the question.So why would you?
So why would you?