{"id":3533,"date":"2019-02-19T14:08:29","date_gmt":"2019-02-19T20:08:29","guid":{"rendered":"https:\/\/kramerwealth.com\/?p=3533"},"modified":"2024-01-24T09:49:10","modified_gmt":"2024-01-24T15:49:10","slug":"tax-savings-after-70","status":"publish","type":"post","link":"https:\/\/kramerwealth.com\/tax-savings-after-70\/","title":{"rendered":"Tax savings after 70"},"content":{"rendered":"<p class=\"responsive-video-wrap clr\"><iframe title=\"Tax Savings For Those Over 70\" width=\"1200\" height=\"675\" src=\"https:\/\/www.youtube.com\/embed\/7O2B70S5bCw?feature=oembed\" frameborder=\"0\" allow=\"accelerometer; autoplay; encrypted-media; gyroscope; picture-in-picture\" allowfullscreen><\/iframe><\/p>\n<p>The Congressional Joint Committee on Taxation estimates that almost 90% of taxpayers will use the standard deduction when they file their taxes this April 15<sup>th<\/sup>due to the increased standard deduction resulting from the Tax Cuts and Jobs Act of 2017.\u00a0 This leaves many concerned that they will no longer be able to get the tax benefit from charitable contributions, which are only counted when you itemize your deductions.<\/p>\n<p>For taxpayers over age 70 taking <a href=\"http:\/\/kramerwealth.com\/2017\/06\/20\/required-minimum-distributions\/\">Required Minimum Distributions<\/a>(RMDs) from their IRAs, they can direct some or all of their RMD to a charity, called a Qualified Charitable Distribution (QCD), therefore reducing their tax liability from the donation, while still taking the full standard deduction.<\/p>\n<p><strong>Here\u2019s an example of what that could look like:<\/strong><\/p>\n<p>Let\u2019s say a person has $100,000 of annual income, of which, $15,000 is from the RMD from their IRAs.\u00a0They typically donate $10,000 per year to charity.\u00a0 In 2018, they processed a $10,000 QCD to their state association of the Deaf and took the remaining $5000 of their RMD in cash.<\/p>\n<p><span style=\"text-decoration: underline;\">Old tax law:<\/span><\/p>\n<p>$100,000 income<br \/>\n-$4050 personal exemption (no longer applies in 2018)<br \/>\n<u>&#8211; $10,000 itemized deduction from charitable contributions<\/u><br \/>\n$85,950 taxable income<\/p>\n<p><span style=\"text-decoration: underline;\">New tax law:<\/span><\/p>\n<p>$90,000 income (the $10,000 QCD never gets reported to the IRS as income)<br \/>\n<u>-$12,000 standard deduction<br \/>\n<\/u>$78,000 taxable income<\/p>\n<p>$7950 less taxable income to report<\/p>\n<p>In order for the donated funds to be exempt from taxation, they <em>must<\/em>be distributed directly from the IRA custodian to the charity through a QCD.\u00a0 The IRA owner can not take receipt of the funds and then forward the donation on his\/her own.\u00a0 Work with your financial advisor or IRA custodian to ensure the process is done in compliance with IRS rules.\u00a0 As always, consult with your tax advisor to see how your personal taxes will be affected by the new tax laws.<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The Congressional Joint Committee on Taxation estimates that almost 90% of taxpayers will use the standard deduction when they file their taxes this April 15thdue to the increased standard deduction resulting from the Tax Cuts and Jobs Act of 2017.\u00a0 This leaves many concerned that they will no longer be able to get the tax [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":3538,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"video","meta":{"ocean_post_layout":"","ocean_both_sidebars_style":"","ocean_both_sidebars_content_width":0,"ocean_both_sidebars_sidebars_width":0,"ocean_sidebar":"0","ocean_second_sidebar":"0","ocean_disable_margins":"enable","ocean_add_body_class":"","ocean_shortcode_before_top_bar":"","ocean_shortcode_after_top_bar":"","ocean_shortcode_before_header":"","ocean_shortcode_after_header":"","ocean_has_shortcode":"","ocean_shortcode_after_title":"","ocean_shortcode_before_footer_widgets":"","ocean_shortcode_after_footer_widgets":"","ocean_shortcode_before_footer_bottom":"","ocean_shortcode_after_footer_bottom":"","ocean_display_top_bar":"default","ocean_display_header":"default","ocean_header_style":"","ocean_center_header_left_menu":"0","ocean_custom_header_template":"0","ocean_custom_logo":0,"ocean_custom_retina_logo":0,"ocean_custom_logo_max_width":0,"ocean_custom_logo_tablet_max_width":0,"ocean_custom_logo_mobile_max_width":0,"ocean_custom_logo_max_height":0,"ocean_custom_logo_tablet_max_height":0,"ocean_custom_logo_mobile_max_height":0,"ocean_header_custom_menu":"0","ocean_menu_typo_font_family":"0","ocean_menu_typo_font_subset":"","ocean_menu_typo_font_size":0,"ocean_menu_typo_font_size_tablet":0,"ocean_menu_typo_font_size_mobile":0,"ocean_menu_typo_font_size_unit":"px","ocean_menu_typo_font_weight":"","ocean_menu_typo_font_weight_tablet":"","ocean_menu_typo_font_weight_mobile":"","ocean_menu_typo_transform":"","ocean_menu_typo_transform_tablet":"","ocean_menu_typo_transform_mobile":"","ocean_menu_typo_line_height":0,"ocean_menu_typo_line_height_tablet":0,"ocean_menu_typo_line_height_mobile":0,"ocean_menu_typo_line_height_unit":"","ocean_menu_typo_spacing":0,"ocean_menu_typo_spacing_tablet":0,"ocean_menu_typo_spacing_mobile":0,"ocean_menu_typo_spacing_unit":"","ocean_menu_link_color":"","ocean_menu_link_color_hover":"","ocean_menu_link_color_active":"","ocean_menu_link_background":"","ocean_menu_link_hover_background":"","ocean_menu_link_active_background":"","ocean_menu_social_links_bg":"","ocean_menu_social_hover_links_bg":"","ocean_menu_social_links_color":"","ocean_menu_social_hover_links_color":"","ocean_disable_title":"default","ocean_disable_heading":"default","ocean_post_title":"","ocean_post_subheading":"","ocean_post_title_style":"","ocean_post_title_background_color":"","ocean_post_title_background":0,"ocean_post_title_bg_image_position":"","ocean_post_title_bg_image_attachment":"","ocean_post_title_bg_image_repeat":"","ocean_post_title_bg_image_size":"","ocean_post_title_height":0,"ocean_post_title_bg_overlay":0.5,"ocean_post_title_bg_overlay_color":"","ocean_disable_breadcrumbs":"default","ocean_breadcrumbs_color":"","ocean_breadcrumbs_separator_color":"","ocean_breadcrumbs_links_color":"","ocean_breadcrumbs_links_hover_color":"","ocean_display_footer_widgets":"default","ocean_display_footer_bottom":"default","ocean_custom_footer_template":"0","ocean_post_oembed":"","ocean_post_self_hosted_media":"","ocean_post_video_embed":"","ocean_link_format":"","ocean_link_format_target":"self","ocean_quote_format":"","ocean_quote_format_link":"post","ocean_gallery_link_images":"off","ocean_gallery_id":[],"footnotes":""},"categories":[19,23,22],"tags":[34,33],"acf":[],"_links":{"self":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts\/3533"}],"collection":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/users\/8"}],"replies":[{"embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/comments?post=3533"}],"version-history":[{"count":1,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts\/3533\/revisions"}],"predecessor-version":[{"id":4657,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/posts\/3533\/revisions\/4657"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/media\/3538"}],"wp:attachment":[{"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/media?parent=3533"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/categories?post=3533"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/kramerwealth.com\/wp-json\/wp\/v2\/tags?post=3533"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}