A WORD ON THE NEW TAX REFORM LAWS
 
Many rumors surround the new comprehensive tax law changes enacted by Congress in December. We’d like to help clarify the news regarding the charitable deduction for our parishioners. As always, giving by cash, check or credit cards is still the most common way of making a charitable contribution. The new tax law continues to encourage such gifts; in fact it expands the limit of the amount you can deduct.
In past years, gifts of cash could eliminate tax on up to 50% of your adjusted gross income (AGI) each year. The new law expands this amount to 60% of your AGI. Any amounts not deductible in a given year can be carried over for up to five additional years.
If you itemize your deductions, your charitable gifts may reduce your federal income taxes as well as your state income taxes if applicable. Your actual savings will depend on your income tax rate and other factors.
Another positive change in the new tax law is the repeal of a provision that required higher income taxpayers to reduce their itemized deductions by a percentage of their income. This had caused some to lose up to 80% of the value of their deductions. If you were affected by this limitation, you will enjoy the full value of your deductions for 2018 and beyond.
The message we send is that charitable giving WILL NOT be negatively impacted by the new tax law. Generally, the higher your tax bracket, the greater savings from your charitable gifts are possible. Please understand that we are NOT giving tax advice in any circumstance, merely trying to point out our understanding of the changes. Always seek the advice of a professional in regards to any of your financial matters.