2018 Spring Professional Advisor Seminar Presentation

87 Pages·2017·1.29 MB·English

by  Mike Martin

2018 Spring Professional Advisor Seminar
Presentation: Mike Martin
Today’s Agenda – not necessarily in this order
 Review of many (not all) important aspects of the: 2018 Tax Cut and Jobs Act (TCJA)
 What is the law?
 How do the calculations work?
 How will taxpayers, investors, givers react?
 The QBID – This is complicated but critically important
 Charitable Planning Opportunities
 New Significance of QCD – Qualified Charitable Deduction
 Gifts of appreciated securities – still good?
 Estate Planning - Tax Considerations
 The rules have changed and so have planning strategies
 Donor Advised Fund Bundling Strategies
2
2018 Tax Cut and Jobs Act
3
Individual Tax Cuts - 2018
4
 Seven marginal brackets:
 10%, 12%, 22%, 24%, 32%, 35%, 37%
 Four marginal brackets for estates and trusts:
 10%, 24%, 35%, 37%
4
Individual Tax Cuts - 2018
5
 Double the standard deduction – Fewer Sch. A users:
 $12,000 single
 24,000 joint
 No changes made to the elderly and blind additional
standard deductions.
 Eliminate exemptions, personal and dependent.
 What Happens to the gross income test of Qualifying Relative rules?
5
Tax Rates Schedules - Single
2017 Tax Rate Schedule 2018 Tax Rate Schedule
Taxable Income Taxable Income
Tax Rate Tax Rate
Minimum Maximum Minimum Maximum
-- $9,325 10% -- $9,525 10%
$9,326 $37,950 15% $9,526 $38,700 12%
$37,951 $91,900 25% $38,701 $82,500 22%
$91,901 $191,650 28% $82,501 $157,500 24%
$191,651 $416,700 33% $157,501 $200,000 32%
$416,701 $418,400 35% $200,001 $500,000 35%
$418,401 -- 39.6% $500,001 -- 37%
6
Tax Rates Schedules – Married Filing Jointly
2017 Tax Rate Schedule 2018 Tax Rate Schedule
Taxable Income Taxable Income
Tax Rate Tax Rate
Minimum Maximum Minimum Maximum
-- $18,650 10% -- $19,050 10%
$18,651 $75,900 15% $19,051 $77,400 12%
$75,901 $153,100 25% $77,401 $165,000 22%
$153,101 $233,350 28% $165,001 $315,000 24%
$233,351 $416,700 33% $315,001 $400,000 32%
$416,701 $470,700 35% $400,001 $600,000 35%
$470,701 -- 39.6% $600,001 -- 37%
7
Capital Gains - 2018
8
 Under the Act, a 0% capital gains bracket applies to capital
gains “below the 15% rate threshold” ($77,200 for a joint return
or surviving spouse, $51,700 for a head of household, half of the
joint amount for other individuals, and $2,600 for estates and
trusts).
 A 15% bracket applies to gains below the 20% rate threshold
($479,000 for joint return or surviving spouse, half the joint
amount for a married individual filing separately, $425,800 for
any other individual, and $12,700 for an estate or trust).
8
Tax Rate Schedules
Amounts were simply adjusted for inflation from 2017. The capital gains tax rate schedules no longer tie to the
ordinary income tax rate schedules.
2018 Long-Term Capital Gains & Qualified Dividends Rates
Single Married Filing Jointly
Taxable Income Tax Rate Taxable Income
Minimum Maximum Minimum Maximum
-- $38,600 0% -- $77,200
$38,601 $425,800 15% $77,201 $479,000
$425,801 -- 20% $479,001 --
The 3.8% Net Investment Income Tax applies to single taxpayers with modified adjusted gross income (MAGI) in
excess of $200,000 and married taxpayers filing jointly with MAGI in excess of $250,000.
9
Deductions, Exemptions & Credits
Standard Deductions
Filing Status 2017 2018
Single $6,350 $12,000
Married Filing Jointly $12,700 $24,000
Additional Standard Deductions
Filing Status 2017 2018
Single, Age 65+ OR Blind $1,550 $1,600
Single, Age 65+ AND Blind $3,100 $3,200
Married, Age 65+ OR Blind $1,250 $1,300
Married, Age 65+ AND Blind $2,500 $2,600
*Per Person
10