Tips For Charitable Giving With the New Tax Bill


There will be big changes in how people give to charities this year. The tax bill that was passed in December included many provisions that will likely have a lot of people changing from itemized deductions to receiving a much simpler $24,000 deduction (for joint filers). By doing this, people will likely think twice before making a charitable donation because it will probably no longer be deductible on their tax return since they don’t itemize. If you are one of those people, we have a few ideas for you.

One idea, if you are over age 70 ½ and receive Required Minimum Distributions (RMDs), is that you can choose to donate part or all of those RMDs to charity! The IRS has a provision that allows this donation to go directly from the IRA to the charity, counting as part of the required distribution. This is called a Qualified Charitable Distribution. This will have the effect of the income not hitting your tax return at all and so is actually better than a deduction.

Another option is to set up a Donor Advised Fund (DAF). This is an account that allows you to make lump sum contributions to the fund and claim the corresponding deduction on your tax return in the year made. Then, at your leisure over as many years as you would like, you can direct the DAF to dole out any dollar amount of your choosing to any charity. In order to make sure you can deduct it on your tax return, we suggest “bunching” your donations so that you make sure your itemized deductions are greater than your standard deduction. For example, you can donate 5 years’ worth of donations to the DAF to bump you into itemizing on your tax return one year. Then, you can divvy out the donations at your leisure over the next 5 years until you’re ready to do it all again!

And of course, you can ALWAYS give to charity without worrying about making it a tax deduction.

Caissa’s Tax Update: Details about the Bill to be Voted On

“Tax Cuts and Jobs Act” of 2017 (TCJA)

Written by Kelly S. Olson Pedersen, CFP®, CDFA

December 18, 2017

We have more and more information coming out about the tax bill that will likely be voted on this week. I have put together a few “Cliff Notes” on the details in the bill that will likely pertain to you.

There are a few highlights below or click on the link to get the full summary. There will be a lot of planning to do in 2018!!!

Read Kelly’s Summary Here

If you have any questions, please don’t hesitate to call or email me.


  • New Brackets: The TCJA did not cut the number of brackets as much as they first indicated and these brackets are set to sunset in 2025. See the table in the full summary
  • Capital gains will be 0% up to $38,600 individuals/$77,200 married. After that it is 15% and jumps to 20% for $452,400 Individual/$479,000 Joint (more marriage penalties!). The 3.8% medicare surtax on those making $200,000 individual/$250,000 married will be added to the capital gains tax.
  • Standard deduction and personal exemptions MERGE. You will no longer get an exemption deduction for each person in your family. Instead, the standard deduction will be $12,000 for individual/$24,000 married
  • State income taxes AND Real Estate taxes are COMBINED and limited to $10,000. This will have a huge impact on clients that are used to deducting state income taxes AND real estate taxes.
  • Home equity indebtedness will NO LONGER be deductible. However, Home equity debt used specifically to make a substantial improvement on a house IS deductible. So it is about what you use the money for that will make it eligible or not.

Read Kelly’s Summary


Market Update: November

Chart of the Week:

Unemployment is still declining as wages are inflating (albeit at a bit slower pace – see below).  Wage inflation is one of the leading indicators of an inflationary economy – one that the Fed desperately works to keep from OVER inflating or NOT inflating enough. The rate of interest is the main tool they use to help with this.

Jerome Powell, the Federal Reserve governor set to replace Janet Yellen as the Federal Reserve Chairman, testified before the Senate Banking Committee on Tuesday. He signaled he would stick to a similar monetary-policy course as Chairman Yellen if he is confirmed as the central bank’s next leader. That likely means raising short-term interest rates in December and gradually lifting them higher over the next two years.

He also told a Senate panel that he is open to reviewing banking industry rules to make them less burdensome and allow more free business. Mr. Powell said he expects the economy to grow about 2.5% this year and maintain about that pace throughout 2018. He also noted that the unemployment rate could fall below 4% next year and that wage growth remains well below the pace of previous economic expansions.

However, he reiterated that delaying future rate increases could risk the economy overheating, which would force the Fed to raise rates more quickly than desired.  Raising rates abruptly, perhaps sharply, raises the probability of triggering a recession.

This is what our investment committee is constantly keeping an eye on – leading indicators for a recession. We are less concerned with short term drops and pops due to headlines but mostly looking for any indication of recessionary markers. We change investment mixes accordingly.