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Tax Reform: What Does It Mean to You in 2013?

The tax legislation passed by Congress on January 1, 2013 will impact Americans in several areas including charitable IRAs, income tax rates, capital gains and estate taxes and itemized charitable deductions. The following is a summary of the major components that may affect you.

Key Elements of the New Legislation:

• No dollar cap on deductions
• No 28 percent limitation for high-income earners
• For those earning $250,000+ (single)/$300,000+ (married/joint), value of deductions reduced by 3 percent of income above that threshold, not to exceed 80 percent of total deductions

2013 Personal Exemption:  $3,900
Standard Deductions:  $12,200 Joint   $6,100 Single

God’s hand of protection on the U.S. Tax Code and its charitable deductions has been gracious. Proposed changes could have raised taxes even higher and limited deductions significantly. Instead, relatively minor changes were enacted. The new rules raise taxes for high income earners but leave in place provisions for minimizing taxes. Each person’s situation is unique and should be addressed individually. Our team of professionals at the Great Commission Foundation (GCF) is available to advise you on how these increases and other tax, gift and estate changes will affect you. In many cases, taxes can be reduced and even zeroed out by proper planning. Plus, you can receive this counsel without obligation; it’s a complimentary service of the ministry. You can contact us and our GCF team today by calling toll free (800) 449-5454 or email: info@gcfccc.org. When you call or email mention code NY0JWP.

GIFT AND ESTATE TAXES

Good news on several transfer tax-fronts: exemptions are unchanged and rates are down. Plus, you may make up to $5,250,000 of taxable transfers during your lifetime, or at your death, without any gift or estate tax.

In addition, the top estate/transfer tax rate in 2013 is 40%. The “annual exclusion” from the gift tax is currently $14,000 per recipient. This allows each person to give an unlimited number of $14,000 gifts each year during his or her lifetime without incurring a gift tax. There is no limit for charitable deductions.