Planned Giving News and Information
 
April, 2016
The following is intended as general information and does not represent legal or tax advice. The information presented is the view of the author. Individual circumstances vary - please consult your legal and tax advisors about your specific situation. To return to the general planned giving pages, please close this browser window. This News and Information section has been compiled by Future Focus.

"We are rich only through what we give, and poor only through what we refuse."

Anne Swetchine


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Tax Problem With Outliving The End Of Life Insurance Mortality Tables
The conventional view of “whole life” and other forms of “permanent” insurance coverage is that the policies are designed to last for your entire life, however long you may live. As long as you keep paying the premiums, you can keep your coverage, until it pays out as a tax-free death benefit.
However, the reality is that the underlying structure of permanent insurance, and the key characteristic that makes it affordable to have coverage – even in the later years of life – is that a “permanent” insurance policy actually has an ultimate maturity date, such as age 100. Which means if you live beyond that point, the policy “matures” and pays out its face value!
And the problem with outliving life insurance is not merely that the policy matures and pays out its benefit, but the fact that it was paid while alive – and not as an actual death benefit – meaning the payout is a taxable gain to the policyowner! In other words, outliving the life insurance maturity date not only marks the end of life insurance coverage itself, but a taxable event! Read more.

Tax Season Retirement Savings Strategies For Procrastinators
So you didn’t get around to saving for retirement in 2015? There’s still time, thanks to rules that give you a grace period into 2016 to make 2015 contributions to an IRA, a Roth IRA, and for those with self-employment income, also a SEP-IRA. You could potentially sock away a total of $59,500 for 2015.
“Everyone’s looking for that last dollar of tax deduction, so the retirement plan contribution is wonderful from our standpoint; usually it’s a relatively big dollar amount, and it’s something they can do after the fact and have it go back and affect the prior year,” says Geoffrey Harlow, a CPA and partner at Kessler Orlean Silver in Deerfield, Ill. Read more.

Study Predicts No Major Tax Reform in 2016
An annual tax survey by the National Foreign Trade Council and Miller & Chevalier Chtd. revealed that most tax professionals do not expect a major tax reform bill in 2016. Marc J. Gerson, Vice Chair of the Tax Department of Miller & Chevalier, suggested that tax reform will only occur if it is a priority for the new administration. He noted, “Tax reform being made a top priority of the new administration would be a game changer to the dynamics of tax reform and its prospects for enactment.” Gerson formerly was majority tax counsel for the House Ways and Means Committee.
Matthew Gardner is Executive Director of the Institute on Taxation and Economic Policy. He noted that while corporate tax rates are high, corporate tax revenue is “low, as a share of the economy, compared to other nations.” Gardner suggests that corporate tax reform should be revenue-neutral. The survey executives preferred a corporate rate from 25% to 28% and an individual rate of 35%. From Giftlaw

The Estate Planners: What Documents Do I Need To Start An Estate Plan?
When you hear the words “estate plan,” you probably think of the sensationalized courtroom battles that happen between the heirs of celebrities or business tycoons vying for an inheritance worth millions.
In real life, however, good estate planning is actually what helps eliminate all that drama. And it’s not reserved for the old and wealthy—it’s important for people at every income level who want to help protect their finances and avoid future conflict between family members.
But all too often, creating an estate plan falls by the wayside: A 2014 survey found that 64% of Americans didn’t have a will—with 57% saying it was simply because they hadn’t gotten around to making one. Well, now is as good a time as any to start—on not only creating a will but also all the other elements that help make up an estate plan. Read more.

Six Facts You Should Know Before Deducting a Charitable Donation
If you gave money or goods to a charity in 2015, you may be able to claim a deduction on your federal tax return. Here are six important facts you should know about charitable donations. Read more.

A Comparison of Presidential Tax Plans and Their Economic Effects
2016 marks the 30th anniversary of the Tax Reform Act of 1986. Remarkably, in that election year, Congress and the president did what was thought to be impossible—work in a bipartisan manner to defy the armies of interest groups and lobbyists in Washington and enact sweeping tax reform.
2016 is also an election year and tax policy is, again, a big issue. But unlike 1986, tax reform is getting mentioned more on the campaign trail than on Capitol Hill. Almost every single candidate in both parties has introduced policies that would alter our tax code. However, the approach that candidates have taken differs tremendously.
For a side-by-side summary of the details and economic effects of each presidential tax plan, Read more.

IRS Wraps Up the "Dirty Dozen" List of Tax Scams for 2016
The Internal Revenue Service today wrapped up its annual "Dirty Dozen" list of tax scams with identity theft topping this year's list but with phone scams and phishing schemes also deserving special mention. Taxpayers need to guard against any ploys to steal their personal information, scam them out of money or talk them into engaging in questionable behavior with their taxes.
During the past year, as part of the Security Summit initiative, the IRS partnered with states and the tax industry to enhance coordination and create a more secure system for taxpayers. Participants now regularly share details of fraudulent schemes detected so both industry and government can provide increased protection. Many enhancements are invisible to taxpayers. Read more.

Early Retirement Distributions and Your Taxes
Many people find it necessary to take out money early from their IRA or retirement plan. Doing so, however, can trigger an additional tax on top of the income tax you may have to pay. Here are a few key points to know about taking an early distribution: Read More

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Please note, individual financial circumstances will vary. The information on this site is meant as general information and does not represent legal or tax advice. The information presented is the view of the author. As with all tax and estate planning, please consult your attorney or estate specialist. All material is copyrighted and is for viewing purposes only. This News and Information section has been compiled by Future Focus. Please report any problems to webmaster.