In the financial world, 2018 was an eventful year – starting with the most sweeping tax reform in decades.
The reform had a lot of positive impacts, but I think one unintended consequence was the impact on charitable giving. Because of the new standard deduction, it’s estimated that only 16 million taxpayers will able to make a deduction for their charitable contributions. That’s down more than 50 percent from when the standard deduction was not as high and more people itemized.1
Many charities will likely see reduced gifting because donors lose the financial benefits of making a donation. However, a few outlets have been talking about a unique gifting strategy – Qualified Charitable Distributions, or QCDs.
QCDs aren’t new. They’ve just been out of favor – or at least unknown – for some time. Previous tax brackets and limits for itemized deductions made this strategy less favorable. Today, with a higher standard deduction for individuals and older couples, QCDs will become much more valuable for charitable contributions.
If you’re not familiar, here’s how QCDs work:
For retirees, the result can be hundreds to thousands of dollars in tax and premium savings. Using this type of charitable contribution allows your clients to continue benefiting their favorite charity without taking a hit to their personal finances.
2019 is new ballgame. New tax laws. New regulations. New strategies. Try a new way to help clients with Qualified Charitable Distributions.
Catch the final retirement webinar of 2018 where Mike is joined by retirement income expert Patricia Taylor, MBA, ChFC®, CFS®.
Watch the replay to hear case studies and strategies that highlight new, untapped and hidden opportunities for 2019, and how you can make yourself more referable than your competition!Watch Now!
About the Author
Mike McGlothlin is a team leader, retirement industry activist and disciple of Indiana Hoosier basketball. In addition to being EVP of retirement at Ash Brokerage, he is a sought-after writer and speaker. His web series, “Winning Strategies,” provides insight and motivation for financial advisors in many forms – blogs, books, videos, podcasts and more. His latest book, “Free Throw for Financial Professionals,” is available now – learn more at www.freethrowsforpros.com.
1Tax Foundation, “Nearly 90 Percent of Taxpayers Are Projected to Take the TCJA’s Expanded Standard Deduction,” September 2018: https://taxfoundation.org/90-percent-taxpayers-projected-tcja-expanded-standard-deduction/
© 2018 Ash Brokerage LLC.