Tax Facts

Information to help individuals and small business navigate our complex Tax Laws. Not to be construed as tax advice. Contact your hired tax advisor for your specific tax situation and advice.

Charitable Donations in 2019 and your IRA RMD

If you are over 70 1/2 and are required to start or continue taking money as income from your IRA, it is known as an RMD or Required Minimum Distribution. This is the tax law that requires you to start taking at least a minimum amount of money out of your retirement account and start paying taxes on it.

If you are tithing or giving money to charity each year, you may not get a tax deduction for that charitable donation if you no longer exceed the new standard deduction, which has essentially doubled.

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Tax Reform: Proposed New Tax Brackets


Currently, there are eight regular individual income tax brackets and they are: 0%, 10%, 15%, 25%, 28%, 33%, 35% and 39.6%. Such a large set of tax brackets can easily move you into a higher tax rate sooner (as you make more money), especially when considering the bracket thresholds. Note that politicians and journalists often fail to mention the 0% tax bracket - but it does exist. With standard deductions, exemptions and tax credits, many citizens pay zero in tax and actually receive money when they file (called credits on the tax return).

The new Tax Cuts and Jobs Act (TCJA) proposes to cut those eight tax brackets down to only five: 0%, 12%, 25%, 35% and 39.6%. The zero percent bracket in the new proposal is significant because of the proposed enhanced standard deduction (essentially doubles) - the impact of which is that those who might have paid some tax will now pay zero tax with such a high standard deduction against their income - and of course receive credits (money in the form of a refund) as well.

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