Episode #4: Tax Law Changes To Affect Charitable Giving
July 19, 2018
“RETIRE WITH INTEGRITY” PODCAST
We feature Keith Farmer and discuss his ministries Straight Street and Street Ransom. We’ll also examine the tax law as it pertains to charitable giving.
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[8:19] – Human Trafficking Is In Our Backyard.
- Globally, there are 4.5 million women and children who are victims of sex trafficking. Every day, one hundred thousand escort ads are posted online, and in 2016, the National Human Trafficking Resource Center reported 106 cases of sex trafficking in Virginia. That ranks Virginia at 15th nationwide in the number of people being trafficked each year. It’s easy to understand this issue exists worldwide. It’s much harder to recognize it in our hometown. According to their website, Street Ransom exists to restore victims of human trafficking and inform young people about the lures and traps connected with sexual exploitation. Street Ransom also engages in public awareness.
[28:31] – The New Tax Law Is Affecting Your Giving.
- Let’s say you want to give to Straight Street or Street Ransom. In the old days (just last year), you could receive a tax deduction on your charitable giving after reaching your standard deduction of $6,000. Today, if you’re married, you get a standard deduction of $24,000. If you’re filing single (but not Head Of House), your standard deduction is $12,000. Of course, this is great news. However, it basically means that unless you’re giving a lot of money (more than the aforementioned amounts), it’s not in your best interest to itemize your deductions. Luckily, there are other ways to give. Let’s say you normally give $500 a month. Instead, consider putting your money into a Charitable Lead Trust. A Charitable Lead Trust enables to put any money you want to give in one place. The trust then dispenses appropriate amounts to each organization. This trust in turn allows you to take your deduction up front. If you’re in a higher tax bracket, using this trust could save you a lot of money.
[36:02] – What Can We Learn From Tom Hanks?
- Tom Hanks was earning about $4 million dollars per movie in 1994 when he decided to start taking a percentage of each movie’s profits. His net worth has since skyrocketed. There’s a lesson to be learned from this. Hanks knew he was never guaranteed a future job. Therefore, instead of taking his salary up front, he elected instead to profit share and delay his salary until a later date. As a result, he ended up with more money than he would have had he taken a salary. It’s important to work with an advisor and develop a plan for your wealth.
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