talents Wheaton College Gift and Financial Planning Newsletter

FALL 2018

Dear Friends,

Last December, Congress passed the Tax Cuts and Jobs Act of 2017 (TCJA). The TCJA made some sig-nificant changes to our tax laws, many of which were beneficial (and some which were detrimental) to taxpay-ers, depending on their specific circumstances. Some changes may affect the ways in which taxpayers give to charitable organizations and the effect of such giving on their tax bills. In this issue, we discuss some of the new challenges confronting charitable giving for those who,

because of the higher standard deduction, will no longer itemize deductions. We also discuss some of the strategies which help both non-itemizers and itemizers be good stewards in their charitable giving under the new tax act.

Speaking of “new,” in this issue we also introduce our new Associate Director of Gift Planning, Lindsay Jurgensen. Lindsay loves Wheaton and is a great attorney who is looking forward to serving those who support the ministry of Wheaton College. You will enjoy learning more about her.

Finally, as you may have heard, our gift annuity rates increased as of July 1. Please let us know if you would like a no-obligation gift annuity illustration for your personal situation.

David A. TeuneDirector of Gift Planning Services

INSIDE THIS ISSUE

Making the Most of 2-3 Charitable Giving Tax Cuts and Jobs Act 3- Pros and Cons Tax Cuts and Jobs Act 3- The Good News

Meet Lindsay Jurgensen 4

irA chAritAbLe roLLoverIn 2015, Congress enacted the law which per-manently allows taxpayers, age 70½ or older, to make Qualified Charitable Distributions (QCDs) from their individual retirement accounts directly to charities (up to $100,000 per year). The QCD may fulfill the taxpayer’s required mini-mum distribution and eliminate the distribution from the taxpayer’s adjusted gross income. The TCJA did not change this law. If you previously itemized your deductions but can no longer do so under the TCJA, you might, now more than ever, consider making a gift to charity through an IRA distribution. It will be considered a QCD from your IRA, and you will receive an “above the line deduction” for the charitable contribution

This increased standard deduction, along with new limits on the mortage interest and state and local tax deductions, will eliminate many taxpayers’ ability to itemize their deductions. The charitable giving of those taxpayers will, in effect, be penalized. Thus, we want to examine some basic techniques which will allow these otherwise frustrated taxpayers to enjoy tax benefits for their charitable contributions. However, the increased standard deduction does not affect all charitable givers. Indeed, many of those who have the means and chari-table intent to make major gifts will itemize; but even they may be able to enhance the tax benefits of charitable giving using the following techniques.

As noted in the adjacent box, under the Tax Cuts and Jobs Act, the standard deduction for most taxpayers has nearly doubled.

Making the Most of Charitable Giving Under the Tax Cuts & Jobs Act

As noted in the adjacent box, under the Tax Cuts and Jobs Act, the standard deduction for most taxpayers has nearly doubled.

at least to the extent you are otherwise required to take annual IRA distributions.

Additionally, since QCDs reduce adjusted gross income, you can potentially reduce state income taxes (depending on your state) and increase other deductions that hinge on adjusted gross income, such as the med-ical expense deduction.

bunching contributionsDepending on your resources, you may also consider doubling (or even tripling) your charitable contributions in one year, so that your intended charitable contributions over three years is accomplished in a single year. This method may bump your itemized deduc-tions up over the standard deduction, thereby allowing you a tax benefit for those charitable contributions.

donor Advised FundThe donor advised fund allows you to make a large charitable contribution in one year that will be distributed to your supported charities over several years. Consider creating a donor advised fund with a charity such as Wheaton College to “bunch charitable contributions” in one year.

AcceLerAte chAritAbLe bequestsAlong the same line of “bunching contribu-tions,” if you have remembered Wheaton in your estate plan and have other assets for medical and other emergencies, you may con-sider accelerating your charitable bequests by making a life income gift. A charitable gift annuity or charitable remainder trust will provide you with a large current charitable deduction beyond your standard deduc-tion, and at the same time create a stream of lifetime income. If you fund a life income gift with appreciated property, you can also avoid capital gains taxes.

Most charitable giving experts agree: the TCJA not only preserved, but in some ways enhanced, the tax benefits of many who in the past were able to itemize their charitable gifts. Because of increased standard deduc-tions and lower tax rates, non-itemizers may expand their discretionary income, enabling them to increase their charitable giving.

Pros:

• Lower tax rates for most taxpayers

• Higher standard deduction

• $12,000 per individual ($24,000 joint)

• $13,300 per individual over 65 ($26,600 joint)

Cons:

• Limits deduction for state and local taxes to $10,000

• Limits mortgage interest deduction

• Eliminates personal exemptions

• Potentially penalizes charitable giving of those who must use higher standard deduction

Tax Cuts and Jobs ActBasic Pros and Cons for Individual Taxpayers

Tax Cuts and Jobs ActThe Good News - What Did Not Change

• No additional limitations on the charitable income tax deduction (for those who itemize).

• Appreciated property gifts still avoid recognition of capital gain.

• Still receive income, avoid taxable gain, and receive charitable deductions for gift annuities and charitable remainder trusts.

• No change in provisions allowing donors age 70 ½ or older to make gifts directly to charity from their IRAs.

• No restrictions on use of donor advised funds, which can help many taxpayers increase the tax benefits of their charitable gifts.

Under the Tax Cuts & Jobs Act

For both itemizers and non-itemizers, the above available techniques continue to incentivize charitable giving.

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wheaton.edu/giftplan | 630.752.5332 | gift.plan@wheaton.edu

© Wheaton College | The information in this publication is for informational and illustrative use only and is not intended as legal or financial advice. For legal or financial advice regarding your own specific circumstances, you should consult with your attorney or other financial or tax professional.

MeetLindsay Jurgensen Associate Director of Gift Planning Services

In August, Wheaton College welcomed a 2008 alumna to the Gift Planning Services team. Attorney Lindsay Jurgensen is the new Associate Director of Gift Planning Services, joining Wheaton’s experienced team of estate

planning and tax law professionals. Originally from Naperville, IL, Lindsay majored in communication and sociology at Wheaton. She worked for a number years in domestic and international nonprofit organizations before earning her law degree from the DePaul University College of Law in Chicago. While in law school, she studied international law abroad, obtained a certificate in public interest law, and was recognized for completing over 200 hours of volunteer public service.

Lindsay is deeply passionate about serving and equipping others, particularly as they seek to follow Christ’s call to stewardship. She would love to hear from you, whether to answer a question or simply to say hello. You can reach her by phone at 630.752.5332 or email at lindsay.jurgensen@wheaton.edu.

What brought you to Wheaton College as a student?

After attending public schools through high school, I desired to further my education in an academically rigorous environment with a distinctly Christian perspective. I was drawn to Wheaton’s commitment to integrate faith and learning, as well as its reputation for academic excellence. The caliber and character of the faculty, staff, and students at Wheaton is unmatched, and I am delighted to return to Wheaton in a professional capacity!

What was your Wheaton experience like as a student?

I loved my time at Wheaton. As a student, I expanded my understanding of the world and Christ’s call, both inside and outside of the classroom. Early on, I had a professor who challenged the class to be mindful of God’s call to be good stewards of our time and talents. With that in mind, I took full advantage of all that Wheaton had to offer.

In addition to taking wonderful courses with outstanding professors, I had the privilege of participating in the Human Needs and Global Resources program in Costa Rica. I also enjoyed rowing for the crew team, running on the women’s cross-country team, and serving with Student Missionary Project (now called Student Ministry Partners).

What excites you about helping Wheaton donors set up planned gifts?

I love problem-solving, particularly by utilizing legal methods to meet a need and reach a goal. Gift and estate planning vehicles can provide generous individuals a means to achieve their charitable objectives while maximizing other benefits. Further, I believe that many of us desire to leave this world in a better condition than we found it. Providing for future generations is a wonderful way to create a lasting legacy. I look forward to assisting donors as they create and further their legacy through planned giving at Wheaton!