2018 Tax Law: What We Know for Sure
Cure CMD and the impact of the new tax law
As many of you know, there is something about living with a rare condition that gives affected individuals, their families and caregivers the ability to adapt to change and handle uncertainty on a daily basis, year in and year out.
Cure CMD mirrors this trait and has taken a moment to reflect on the impact of the new tax law on our work and has found ways to...adapt. What we know for sure is that our community of supporters gives first because of a commitment to the belief that together – a cure is among us.
Just the Facts
First, a cliff note version of the tax plan according to a recent article from the New York Times -
"The tax plan approved by Congress nearly doubles the standard deduction for individuals and families. That could simplify the filing process for millions of Americans, but it will complicate the giving strategies for many who have made a habit of deducting their charitable contributions.
Under the new bill, the standard deduction — the amount taxpayers can subtract from their taxable income without listing, or itemizing, deductions on their tax returns — will rise to $12,000 for individuals and $24,000 for married couples.
This means that means people who are close to the cutoff may stop giving altogether, as they may no longer see tax savings from their giving. Or they might consider pooling their gifts in certain years to beat the expanded standard amount and maximize their tax savings through itemization."
This sounds like doom and gloom for the nonprofit world, but as many of you have already shown, there are options.
A Bunch of Love
Several Cure CMD donors have already utilized Donor Advised Funds to support Cure CMD research projects. Donor Advised funds allow contributors to donate money and take a tax deduction in the same year, then disburse funds to nonprofits over time.
Here's where the new tax law and bunching comes in. A donor could “bunch” several years of donations to a donor-advised fund into one year, and take the tax deduction, but then have the fund pay out the gift annually in equal amounts. In this case, Cure CMD would get the same amount each year, even in years when the donor doesn't itemize.
IRA Part of the Cure
In addition to Donor Advised Funds, Cure CMD has also seen significant support from donors through contributions from their IRAs. According to MarketWatch Columnist, David Moisand -
"The larger standard deduction means fewer people will itemize and that will make qualified charitable distributions, or QCDs, directly from IRAs attractive to more people. However, eligibility to make a QCD is dependent upon age, not your work status.
A QCD can only be done on or after the date on which you turn 70 ½. At that point, you can make Qualified Charitable Distributions (QCD) to qualified charities totaling up to $100,000 a year from your IRA. None of the donation is treated as taxable income yet it counts toward your required minimum distribution.
For the donation to qualify as a QCD, the check must be payable to a qualified charity, not you. If you take a check made payable to you and then donate the money to the charity, the full amount of the check is taxable to you but you may not get a full deduction for the donation."
Cure CMD also accepts gifts of stock and matching gifts.
This valuable insight can help you to make choices that are beneficial to you and to Cure CMD in terms of long term charitable giving.
Cure CMD Moving Forward
As we approach our 10 year anniversary in May, we are even more certain that our donors give first because of our mission – to advance research for treatments and a cure for the Congenital Muscular Dystrophies.
Tax policy may change, but our commitment to finding a cure remains the same.
Thank you for being a part of the Cure.
Related resources and articles
Donor Advised Funds
Chase Phillips, Merrill Lynch Financial Advisor