New Tax Law and Charitable Giving

With the introduction of the tax law this year, you may be wondering how you are impacted. Among the changes:

Income Tax Brackets
Whether you're a single filer or a married person who files jointly, separately, or as head of household, your tax bracket will be new in 2018. The new law maintains seven tax brackets, but lowers rates for most brackets: 10, 12, 22, 24, 32, 35, and 37 percent. Most taxpayers will see their tax rate decrease. A married couple with a combined income of $150,000, for example, will go from a 25 percent tax rate to 22 percent under the new law.

Standard Deduction
The new law nearly doubles the standard deduction to $12,000 for single filers, $18,000 for heads of household, and $24,000 for joint filers.

Itemized Deductions
If you are eligible to itemize in 2018, your deductions may look a little different (though charitable deductions remain under the new law if you are eligible to itemize). If you purchase a new home, there is now a cap on the mortgage interest deduction for the first $750,000 of debt on your primary residence. Under the new plan, if you itemize your deductions, you will be able to deduct up to $10,000 for income, sales, and property taxes.

Charitable Contributions for Cash Gifts
The new law increases the current 50 percent of your adjusted gross income limitation for donations by cash, check, or credit card to 60 percent.

What Didn't Change

Charitable Deductions
You will still be able to deduct your charitable contributions when you itemize your taxes.

Long-Term Capital Gains and Dividends
The tax rates on capital gains and dividends remain the same at 0, 15, and 20 percent, depending on your tax bracket.

Charitable Contributions of Appreciated Property
The limitation on charitable gifts of long-term appreciated property to public charities will remain at 30 percent of your adjusted gross income. You can still carry over any excess for up to five additional years.

Talk With Your Tax Professional
There are many ways you can give this year that not only make a difference at Memorial Sloan Kettering Cancer Center but offer you benefits as well. Please consult with your tax or financial advisors to determine the best charitable giving strategies for you.

A Great Time to Be Charitable

With the lower tax brackets, you may find yourself in a better financial position to help causes that matter most to you. There are many ways you can make a difference at MSK while enjoying financial benefits for yourself. Here are two popular ones:

  1. Name Memorial Sloan Kettering as a beneficiary of retirement plan accounts. Assets in your IRA, 401(k), or other qualified retirement plan accounts remain subject to income tax when distributed to your heirs. If you name MSK as a beneficiary of all or part of your plan, your gift will pass to us tax-free.
  2. Give from your IRA (if you are 70½ or older). Regardless of whether you itemize your taxes, this gift helps you fulfill your required minimum distribution and is not considered taxable income.

We Can Help
If you're wondering how tax reform will affect your charitable contributions, we can help you sort through the changes. Simply contact the Office of Planned Giving at 800-688-1827 or with any questions you have.

Contact Us

Our staff is available to help, in confidence and without obligation.

Toll free: 800-688-1827

If you have included MSK in your estate plans, please let us know.