Fall 2020
Staff Suzanne Allen, Ph.D., Executive Director Brett Fogle, CPA, MT, Director of Finance Carrie Herman, Director of Community Impact Kate DeAngelis, Director of Marketing Kim Miller, Office Manager Board of Directors Dennis Liddle, Chair Josh Gordon, Vice-Chair Jennifer Bidlingmyer, Treasurer Lynne Holcomb, Secretary Jim Bauschlinger Edna Boyle Paul Epner Brett Haverlick Mayor William Judge Tina Linton Craig Megyes Jeff Ramnytz Debra Shreiner Jason Slater
(L-R) Tom Harnden and Dennis Liddle review taxes at his office on Lake Ave.
Talking Tax Changes with Dennis Liddle We asked our Board Chair, Denny Liddle of Raymond James Financial Services, to share insight on recent tax law changes. Tell us first about the Tax Cuts and Jobs Act of 2017. What do we need to know? Denny: This was the biggest tax change since 1986, and changes the way we file our deductions. When thinking about deductions, there are two ways to do it: standard and itemized. If your itemized deductions are higher than the standard, this allows you to deduct charitable contributions. The act changed the standard deduction to $12,400 for individuals and $24,800 for couples filing jointly in 2020. The deduction increases if you’re over 65. That’s a pretty good deduction for people without all the work of itemizing. So now fewer people are itemizing their tax deductions because the standard deduction is typically more beneficial. It is estimated that the changes reduced the number of people itemizing their charitable contributions by more than half, from about 21% to 9% of households. (taxpolicycenter.org) What do we need to know about the SECURE Act (Part of the Appropriations Act of 2020)?
Congratulations Summer! Summer is a Furry Friend of the Foundation. She and owner John Yarsa enjoy visiting different businesses in Barberton and brightening everyone’s day. John hopes Summer will inspire more people to get involved with therapy dog training.
Denny: In the past, if you had an IRA, you were required to make a “minimum distribution” when you turn 70 ½ . On top of that, the distribution is taxable. This act changes the required distribution age to 72. So if you turn 70 or 71 this year, you don’t have to take a distribution if you don’t want it. Second, you can avoid counting the Required Minimum Distribution as taxable income if you
donate it directly to a charity. An individual can contribute up to $100,000 each year to a qualified charity. Call your tax consultant to discuss this tax provision if you decide to donate your IRA’s required minimum distribution to a nonprofit. What are some of the changes the CARES Act makes to current tax law? Denny: The CARES Act does a couple things. First, it provides the option for people to forgo their normal required minimum distribution in 2020. It also gives individuals a one-time, above the line deduction of charitable contributions for up to $300. It’s important to note this deduction is not dependant on if you itemized your deductions. Finally, it removes the 60% limitation of your adjusted gross income for deductability of your charitable contributions. Historically you could only deduct up to 60% of your adjusted gross income and any amount above 60% was carried forward for up to five years. For 2020, you can deduct up to 100% of your AGI. This could allow a tax payer to effectively reduce their taxable income to zero. As a reminder, Denny Liddle and Barberton Community Foundation are not rendering legal, tax, or other professional advice. Information contained in this article is considered accurate as of the date of publishing. We encourage everyone to consult a tax professional before making any decisions regarding their finances.