DEPARTMENTS
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PROFESSIONAL GROWTH
Tax Reform and Charitable Giving for 2018
How to Support the American Industrial Hygiene Foundation at Tax Time
BY TIM WALSH
The 2017 Tax Cuts and Jobs Act tax reform package brought a lot of big changes. For corporations, tax rates declined from as high as 35 percent to 21 percent. In addition, tax incentives were put in place to encourage corporations to bring assets back to the United States, with tax rates as low as 8 percent for some repatriated assets. Revisions also include a 20 percent deduction of qualified business income for many small business owners.

For many individuals, the tax package brings lower tax rates and expanded brackets, meaning more income will be taxed at the lower bands of our progressive income tax structure. New tax rates of 12 percent, 22 percent, and 24 percent replace the 15 percent, 25 percent, and 28 percent rates respectively.  The most prominent change for most filers is the increased standard deduction. Single filers will have a $12,000 standard deduction in 2018 vs. a $6,350 standard deduction in 2017. Married couples filing jointly will have a $24,000 standard deduction in 2018 vs. $12,700 in 2017. Personal exemptions have been eliminated ($4,050 for yourself and for each dependent in 2017) and the deduction for real estate taxes and state and local income tax (RESALT) is capped at an aggregate maximum of $10,000 under the new code. STRATEGIES FOR CHARITABLE GIVING Many of us are going to find that the new, higher standard deduction and the cap on RESALT mean that itemizing deductions is not the most advantageous way to file in 2018. And perhaps the tax benefit of charitable contributions is lost. Thankfully, most people give because they want to support a cause or receiving organization. And many people can, and still will, itemize. Charitable contributions are still tax deductible if you itemize, and there are several strategies that still make sense in terms of charitable giving this year. Aggregation. If your itemized deductions are close to the standard deduction, consider aggregating several years’ worth of your charitable contributions into one year to exceed the standard deduction and benefit from itemizing. Then use the new, higher standard deduction in subsequent years until you are ready to make an aggregated contribution again. Donation of appreciated assets. Cash donations are easy and are always appreciated. But donating an appreciated asset makes so much sense. 
TIM WALSH, ChFC, CLU, CASL, is a financial advisor and wealth manager with Ameriprise Financial Services. He and his team have provided investment council to AIHA since 2002 and to the American Industrial Hygiene Foundation since 2010.