Are My Publications Up To Date?

Are My Publications Up to Date?

The Tax Cuts and Jobs Act of 2017 (TCJA) continued the trend toward reducing the impact of federal estate and gift taxes on personal estate planning. Effective January 1, 2018, the act doubled the estate and gift tax exemption, increased the annual gift tax exclusion and repealed the Pease limitation. Read on for more details and check with your advisors for latest amounts.

The Setting Every Community Up for Retirement Enhancement Act (SECURE Act) made several changes that may serve to encourage charitable gifts from retirement plans after first providing for your needs and those of your loved ones.

The Protecting Americans from Tax Hikes Act (PATH) of 2015 extended and made permanent a number of popular tax breaks, including the charitable IRA provision for those aged 70½ and older.

Also the American Taxpayer Relief Act (ATRA) was passed by Congress in 2013. Combined with the Medicare surcharge tax  are numerous changes that will affect tax incentives for various current and deferred gifts.

Sharpe’s updated publications reflect changes in the laws as a result of TCJA, PATH and ATRA. To assist you in reviewing materials you have now, check for references to the following:

• The American Council on Gift Annuities suggested new payment rates on charitable gift annuities effective January 1, 2020. (See the ACGA website for more information.)
• The current income tax rates that should be used in publications are 37%, 35%, 32%, 24%, 22%, 12% and 10%.
• References to the gift and estate limits should be $10 million for individuals, $20 million for married couples, indexed for inflation; for 2020, the exemption amounts are $11.58 million for singles and $23.16 million for married couples.
• The maximum rate for gift and estate tax was raised to 40% in 2013.
• References to $12,000, $13,000 or $14,000 annual exclusion amounts are no longer accurate. The exclusion has been raised to $15,000.
• The Charitable IRA provision was extended and made permanent.
• The maximum rate for most capital gains and dividend income was increased from 15% to 20%.
• The 3.8% Medicare surcharge tax is added to the lesser of net investment income, including capital gains, or the amount one’s income exceeds the threshold amount.
• The Pease limitation, that reduced the benefit of itemized deductions for some high-income taxpayers, was repealed.

Materials with content that is not accurate in light of the above may be obsolete and should be replaced with updated publications. Versions printed in 2020 may be preferred because of updated and revised copy. If you have questions, please contact us at orders@sharpenet.com or call us at 901-680-5300.