Category Archives: tax planning

How the Wealthy Can Pay Less Tax in 2019

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The Tax Cuts and Jobs Act was signed into law in late 2017, effectively lowering the tax bracket for America’s highest earners from 39.6% to 37%. Most us, however, are somewhere between 22% and 32% and we don’t pay taxes on everything we make. Nonetheless, the new law has made us all pause and rethink how we save and give. We’re looking at creative ways to to protect what you have and bring down taxes.

Here’s what the wealthiest among us are doing:

  1. Not waiting until the end of the year to plan; 
  2. Having regularly scheduled meetings with their financial advisor;
  3. Owning land that can be taxed as a “conservation easement” or green space;
  4. Owning stocks and working with their investment advisor to actively manage capital gains and losses for tax advantages;
  5. Structuring a limited liability company, LLC, to manage investments and deducting management fees as a business expense;
  6. Taking advantage of the temporary doubling of exemptions (until 2025) for estate and gift deductions to lower taxable income;
  7. If you’re a business owner, consider a defined-benefit plan (like a pension) to set aside more tax-deferred money than you can in a regular 401(k).

Of course, these ideas to protect and grow income by lowering tax liability may not work for your particular income and tax bracket, but it may pay to find out now. There’s still time to weigh options and make changes. Call our office for an appointment.

PS: You can still take a deduction for charitable giving, but you have to itemize your taxes and the TCJA nearly doubled the standard deduction to $12,000 for individuals and $24,000 for married couples, making it a higher bench over which to climb.

Time For Stewardship

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With recent news almost totally focused on the 2018 hurricane season and catfights between Democrats and Republicans, we’d like to share a bit of good news about the state of charitable giving and remind our friends that we are barreling toward another tax season.

laboratoryRegardless of our political distractions, we’re still a generous, big-hearted country when it comes to individual giving. It seems that we as a country are on track for a slightly higher percentage increase in 2018 than last year—a banner year for charitable giving. As individuals, we give about 70% of all charitable donations in the U.S. with the balance coming from estates, foundations, and corporations.

The passage of tax reform legislation could change the landscape of charitable giving for some households, but the majority of our clients have benefited from a booming stock market and are enthusiastic about exploring meaningful charitable giving opportunities.

Donor-Advised Funds, where donors receive an immediate tax benefit and can make suggestions about where the money goes, is the #1 rising trend. Now is the time to get in touch with us about adding to, or participating in, donor-advised funds for this tax year.

As always, let the real meaning of “stewardship” remain the driving force for your charity and reason for giving.

Families and Wealth

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Advisors are who people turn to for guidance about charitable giving. A recent study from U.S. Trust and The Philanthropic Initiative found that advisors sometimes fail to put more emphasis on an individual’s or family’s experience with their wealth, and overestimate the importance of tax benefits as their motivation for giving.

Albeit the survey included not just wealth advisors, but also trust and estate attorneys, accountants, and other tax professionals, it is still notable that clients care about their advisor’s ability to discuss personal values and how these values affect their personal investment, giving, and charitable goals.

wisely-invested money growingClients want their advisor to give advice based on personal motivations for giving, a passion for a cause, the effect that their giving has on their community and a strong desire to give back.

Clients want to be connected to nonprofit organizations that share their passion, and they want to know their gifts are being used wisely. We believe that not spending time exploring a family’s experience with their wealth—and digging deep to find motivation to help nonprofits whose missions “connect” with an event or situation personally experienced—can mean missed opportunities for donors to do good in areas that are important to them.

At the Stewardship Foundation, it’s clear that we are passionate about our four tenets: respect for life, marriage being between a man and a woman, religious freedom, and rights of conscience. We believe that it’s our responsibility to care for the poor, the sick and the disadvantaged, and for every woman, man, and child whose life is impacted with lack of education, opportunity and freedom.

We believe in transformational giving, the kind that comes from the heart, and that changes lives in our community and in the greater world. We are firm in our commitment to knowledge about structured giving—charitable trusts, donor-advised funds, and the rest—but in practice, we believe it starts with a balanced conversation between the technical tools to reach financial goals and the personal reasons for doing so.

If you’d like to explore your family’s experience with wealth to better charter your giving, please call us at (614) 800-7985 and please share this with someone you believe might benefit from our balanced advisory services.