Are Planning Changes Needed Under the 2017 Tax Act?

On December 21, 2017, President Trump signed the tax bill. While the bill will not take effect until 2019, those with a plan can take advantage of changes in the law so that their inheritors will not have to pay as much tax. The Tax Cuts and Jobs Act contains more changes than any tax bill since the one passed in 1986. Therefore, people may want to consider making some changes.

Changes to Charitable Giving

The Tax Cuts and Jobs Act raises the amount that people can give to charities to 60 percent of their adjusted gross income for cash donations. Those individuals who choose to give appreciated property, however, may not give more than 30 percent of their adjusted gross income. This change means that more people can benefit from creating a donor-advised fund. People have the option of allowing their children or grandchildren to decide which charities receive funding or they can opt to keep the decision making power. Alternatively, older adults may want to add their children as administrators on the account.

Consider Estate Taxes

While the House did not get their way in eliminating the estate tax altogether, the new Tax Cuts and Jobs Act nearly doubles the amount that a person can receive before they have to pay taxes on it. The amount will be $10.6 million per person with couples being allowed to give double that before any taxes are paid. The amount is set to inflation, so it might even raise over the next few years. At the moment, this part of the law is expected to revert to the $10 million level in 2025. Those controlling large family farms or family-owned businesses will want to discuss the matter further with their tax advisor. Some people may benefit from buying large irrevocable life insurance trusts.

If you need to write a new will or modify your current one, then make sure to see a probate attorney in Las Vegas. He or she can help you draw up the document so that it helps you save money on your taxes now that Congress has finally acted.