Laurie Hall: Charitable Gifts & Potential Tax Changes

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With potential January 1, 2013 tax law changes around the corner, is it better to make a substantial gift this year or wait until 2013?

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Laurie Hall: Charitable Gifts & Potential Tax Changes

  1. 1. Laurie Hall on Charitable Gifts and thePotential January 1, 2013 Tax LawChanges© 2012 Edwards Wildman Palmer LLP & Edwards Wildman Palmer UK LLP
  2. 2. Considerations For An Uncertain Time.With potential January 1, 2013 tax law changes around the corner, is it better to make a substantial gift this year or wait until 2013?There are two significant changes will impact whether 2012 or 2013 charitable gifts result in a larger tax savings… Laurie-Hall.com
  3. 3. If The Tax Cuts Expire.♦ The highest marginal rate will increase from 35% to 39.6% on January 1, 2013♦ And therefore, a charitable deduction made in 2013 could shelter income that is taxed at a higher rate – in effect making, a 2013 gift more valuable Laurie-Hall.com 3
  4. 4. If Limitations Are Reinstated.♦ For this purpose, a high income taxpayer was identified at $166,800 and indexed for inflation in 2009♦ Limitations on itemized deductions could be reinstated for high income taxpayers – including charitable deductions Laurie-Hall.com 4
  5. 5. The End Result.♦ High income taxpayers who may lose a significant percentage of the deduction may want to accelerate charitable gifts in 2012♦ Taxpayers whose AGI will not exceed the applicable threshold may want to wait until 2013 to shelter from higher rates Laurie-Hall.com 5
  6. 6. However…♦ Congress may act prior to the end of the year to extend the Bush tax cuts♦ In that case, the general rule of taking deductions sooner rather than later would apply Laurie-Hall.com 6
  7. 7. Additional Resources.♦ How will the potential year end changes impact my personal planning?♦ What – if any – actions should be taken before the end of the year? If you’re asking yourself these questions, see Edwards Wildman’s client advisory here. Or head to Laurie Hall’s blog here. Laurie-Hall.com 7
  8. 8. For more information on Edwards Wildman, please visit: EdwardsWildman.com Laurie J. Hall Partner +1 617-239-0136 lhall@edwardswildman.com LaurieHall.com© 2012 Edwards Wildman Palmer LLP & Edwards Wildman Palmer UK LLP

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