With the introduction of tax reform this year, you may be looking at your finances and wondering how you will be impacted. For many taxpayers, the new tax law creates an opportunity in the form of increased disposable income. Here are a few of the changes that may affect you.
Whether you’re a single filer or a married person who files jointly, separately or as head of household, your tax bracket will be new in 2018. The new law maintains seven tax brackets, but lowers rates for most brackets: 10, 12, 22, 24, 32, 35 and 37 percent. Most taxpayers will see their tax rate decrease. A married couple with a combined income of $150,000, for example, will go from a 25 percent tax rate to 22 percent under the new law.
The new law nearly doubles the standard deduction to $12,000 for single filers, $18,000 for heads of household and $24,000 for joint filers.
The new tax law repeals the personal exemption.
If you elect to itemize this year, your deductions may look a little different (though charitable deductions remain under the new law). If you purchase a new home, there is now a cap on the mortgage interest deduction for the first $750,000 of debt on your primary residence. Under the new plan, if you itemize your deductions, you will be able to deduct up to $10,000 for income, sales and property taxes.
The new law increases the 50 percent of your adjusted gross income limitation for donations by cash, check or credit card to 60 percent.
There are many ways you can give this year that not only make a difference at The Jackson Laboratory, but offer you benefits as well. Please consult with your tax or financial advisors to determine the best charitable giving strategies for you.
With the lower tax brackets, you may find yourself in a better financial position to help causes that matter most to you. There are many ways you can make a difference at JAX while enjoying financial benefits for yourself. Here are two popular ones:
If you’re wondering how tax reform will affect your charitable contributions, we can help you sort through the changes. Simply contact Laura Eldridge, CFRE at (860) 837-2328 or Laura.Eldridge@jax.org with any questions you have.