January 9, 2018
Authored by: Kathy Sherby
The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated all miscellaneous itemized deductions that are subject to the 2% floor, capped state and local taxes deduction at $10,000, and doubled the standard deduction for single persons to $12,000 and married couples to $24,000. As a result of this triumvirate of changes, the individual taxpayer who is over age 70½ is now faced with new computation to make to determine how best to report deductions on the Form 1040 beginning this year and a new opportunity, if managed correctly, to maximize deductions and minimize taxable income.
IRC § 408(d)(8) permits anyone who is over age 70½ to transfer up to $100,000 per year from his/her IRA directly to public charities without reflecting the distribution in taxable income on the taxpayer’s Form 1040. This technique allows the IRA owner to satisfy the taxpayer’s charitable giving and his/her Required Minimum Distribution