“Helping people pursue life goals through good financial decisions.” 1

CHARITABLE GIVING AFTER TAX REFORM

Tax reform changes to the standard deduction and itemized deductions may affect your ability to

obtain an income tax benefit from charitable giving. Projecting how you'll be affected by these

changes is important.

Income Tax Benefit of Charitable Giving

If you itemize deductions on your federal income tax return, you can generally deduct your gifts to

qualified charities. However, many itemized deductions have been eliminated or restricted, and the

standard deduction has substantially increased. You can generally choose to take the standard

deduction or to itemize deductions. As a result of the changes, far fewer taxpayers will be able to

reduce their taxes by itemizing deductions.

Taxpayers whose total itemized deductions, other than charitable contributions, would be less than

the standard deduction (including adjustments for being blind or age 65 or older) effectively have less

of a tax savings incentive to make charitable gifts. For example, assume that a married couple, both

age 65, have total itemized deductions (other than charitable contributions) of $15,000. They would

have a standard deduction of $27,000 in 2019. The couple would effectively receive no tax savings for

the first $12,000 of charitable contributions they make. Even with a $12,000 charitable deduction,

total itemized deductions of $27,000 would not exceed their standard deduction.

Taxpayers whose total itemized deductions, other than charitable contributions, equal or exceed the

standard deduction (including adjustments for being blind or age 65 or older) generally receive a tax

benefit from charitable contributions equal to the income taxes saved. For example, assume that a

married couple, both age 65, have total itemized deductions (other than charitable contributions) of continued on page 4

In This Issue:

▪ Charitable Giving

After Tax Reform

▪ A Circle of Care

▪ Shobe Current

News

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A CIRCLE OF CARE

You’ve heard it before: Americans are living longer. Advances in medicine and technology have increased our longevity

as well as our quality of life. But the latter doesn’t just happen by accident. It takes a savvy senior and a well-

orchestrated team to pull together all the resources needed to maintain a certain lifestyle in retirement.

Get to know some of the professionals who stand at the ready, if and when you should need them for yourself or your

family members.

1. Healthcare Advocates

These professionals can help patients and families navigate public and private medical resources such as Medicare or

individual insurance, as well as help evaluate in-home and long-term care options. Families separated by distance may

take comfort in knowing their loved one is guarded by a healthcare advocate committed to ideal outcomes.

Resources: LeadingAge, Department of Health and Human Services' Elder Care, AARP

2. Medical Specialists

Beyond traditional specialists such as orthopedists or cardiologists, some doctors hold special designations that may be

helpful in your situation. For example, Certified Dementia Practitioners specialize in memory care and medication

management to help mitigate side effects that may exacerbate dementia and Alzheimer’s symptoms. Some health

professionals provide in-home care similar to services you’d find in a hospital or care facility. Start your search by

looking for a caring, compassionate professional who also has experience with situations similar to yours. Verify that

their training meets your state Department of Health’s guidelines.

3. Elder Law Attorneys

Elder law goes beyond basic legal services to help older Americans prepare important documents – such as powers of

attorney, medical privacy release forms, living will and legacy documents – as well as review estate plans and update

beneficiary designations. Other services include long-term care planning, resolving Social Security issues, fighting age

discrimination, establishing conservatorship and litigating elder abuse cases.

Resources: National Academy of Elder Law Attorneys, Bar Association, American Association of Trusts, Estates, and

Elder Law Attorneys

4. Transportation Experts

Driving specialists or driver rehabilitation specialists have backgrounds in occupational therapy and can recommend

mobility equipment that would keep you or a loved one safely on the road for longer. Look for experience, clear pricing

and convenient locations. Experts may have formal designations like Certified Driver Rehabilitation Specialist.

Resources: National Mobility Equipment Dealers Association, Association for Driver Rehabilitation Specialists

directory, AAA

5. Senior Move Managers

Moving can be overwhelming for anyone, but especially for seniors making a lifestyle change. Sorting through a

lifetime of memories and possessions takes time and may be made more difficult by the realization that life is changing

more than expected. That’s where senior move managers come in to help de-clutter, organize and lend perspective

when it’s time to decide what stays and what goes. They can also arrange to sell or donate unwanted items, supervise

movers and then set up a new home.

Resources: National Association of Senior Move Managers,

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Shobe Current News:

Congratulations!

We are proud to

announce Bailey

McNamara has earned

her CERTIFIED FINANCIAL

PLANNER™ Certification

(CFP®) and has been

promoted to a Financial

Planner!

Congratulations!

We celebrated Mason

Goynes’ upcoming

wedding at this month’s

Planning Day Luncheon.

Come July Mason will be

a married man.

Congratulations Mason!

6. Care Managers

These professionals connect families caring for loved ones with the right services, whether for healthcare, housing and

social activities, or legal and financial services. They develop and maintain a care plan that evolves as needs change.

Many caregivers believe they can perform these services for themselves, but experienced care managers often find

appropriate and cost-effective solutions more efficiently than most of us could on our own, saving money and

alleviating stress in one fell swoop.

Resources: National Association of Professional Geriatric Care Managers

7. Aging in Place Experts

Certified aging in place specialists employ universal design ideas to modify and build safer living spaces for those who

want to live independently. Those who have earned the CAPS designation have been certified as specialists by the

National Association of Home Builders.

Resources: National Association of Home Builders, The National Aging in Place Council.

8. Professional Fiduciaries

Professional fiduciaries provide critical assessments and planning for seniors and their families facing medical,

psychological, housing, social, legal and/or financial obstacles. They may be tasked with managing financial affairs or

coordinating day-to-day activities for those who can no longer do so for themselves.

9. Veterans Services

These experts assist veterans and their families with navigating the benefits and integrated health services offered by

the U.S. Department of Veterans Affairs. They can help you find a local VA medical hospital or outpatient facility; apply

for federal benefits and employment assistance; and access specialized programs designed for military members.

Widows and widowers also may need help applying for burial and survivors’ benefits.

10. Financial Professionals

Your financial advisor can work with your estate attorney and an accountant to help pull financial, tax and estate plans

together, and coordinate with other specialists who can help you or a loved one live a fulfilling life throughout

retirement. He or she has likely helped others in similar situations and has the expertise to bring together health and

wealth solutions that can alleviate some of the burden that may come to rest on your shoulders.

You may never need some of these services. But understanding your options and having a contingency plan for “just in

case” ensures you and your loved ones will be well taken care of at a time when they may need it the most.

Sources: Barron’s; National Care Planning Council; Transamerica; MIT AgeLab.

Welcome Back!

We are happy to

welcome back Erin

Sigur Sibley from her

maternity leave!

Both she and baby

Landry Kate are

doing wonderfully!

4

$30,000. They would be entitled to a standard deduction of $27,000 in 2019. If they are in the 24% income tax bracket

and make a charitable contribution of $10,000, they would reduce their income taxes by $2,400 ($10,000 charitable

deduction x 24% tax rate).

However, the amount of your income tax charitable deduction may be limited to certain percentages of your adjusted

gross income (AGI). For example, your deduction for gifts of cash to public charities is generally limited to 60% of your

AGI for the year, and other gifts to charity are typically limited to 30% or 20% of your AGI. Charitable deductions that

exceed the AGI limits may generally be carried over and deducted over the next five years, subject to the income

percentage limits in those years.

Year-end Tax Planning

When making charitable gifts during the year, you should consider them as part of your year-end tax planning. Typically,

you have a certain amount of control over the timing of income and expenses. You generally want to time your

recognition of income so that it will be taxed at the lowest rate possible, and to time your deductible expenses so they

can be claimed in years when you are in a higher tax bracket.

For example, if you expect that you will be in a higher tax bracket next year, it may make sense to wait and make the

charitable contribution in January so you can take the deduction next year when the deduction results in a greater tax

benefit. Or you might shift the charitable contribution, along with other itemized deductions, into a year when your

itemized deductions would be greater than the standard deduction amount. And if the income percentage limits above

are a concern in one year, you might consider ways to shift income into that year or shift deductions out of that year, so

that a larger charitable deduction is available for that year. A tax professional can help you evaluate your individual tax

situation.

Qualified Charitable Distribution (QCD)

If you are age 70½ or older, you can make tax-free charitable donations directly from your IRAs (other than SEP and

SIMPLE IRAs) to a qualified charity. The distribution must be one that would otherwise be taxable to you. You can

exclude up to $100,000 of these QCDs from your gross income each year. And if you file a joint return, your spouse (if

70½ or older) can exclude an additional $100,000 of QCDs.

You cannot deduct QCDs as a charitable contribution because the QCD is excluded from your gross income. In order to

get a tax benefit from your charitable contribution without this special rule, you would have to itemize deductions, and

your charitable deduction could be limited by the percentage of AGI limitations. QCDs may allow you to claim the

standard deduction and exclude the QCD from income.

continued from page 1

QCDs count toward satisfying any required minimum distributions (RMDs) that you would otherwise have to receive from your IRA, just as if you had received an

actual distribution from the plan. Your QCD cannot be made to a private foundation, donor-advised fund, or supporting organization. Further, the gift cannot be

made in exchange for a charitable gift annuity or to a charitable remainder trust.