Tax Reference Guide 2018

About HCF The Hawai‘i Community Foundation has served the people of Hawai‘i since 1916. We steward more than 800 funds and over $640 million in charitable assets. In 2017, we distributed over

We help those who do good, do greater.

$55 million in grants and contracts to the community and it was made possible by our donors, clients, and partners.

What We Promise We enhance the lives of those in need and enrich the lives of those who give.

We create partnerships to tackle tough problems and build stronger communities.

We transform people’s generosity into lasting change.

We share a century of

experience to make giving more effective.

If you would like to learn more about how the Hawai‘i Community Foundation can help you create the greatest impact with your charitable giving, please contact us: O‘ahu Hawai‘i Island Hilo Kamuela Kaua‘i Maui

808-537-6333 808-935-1206 808-885-2174 808-245-4585 808-242-6184

HawaiiCommunityFoundation.org

Tax Reference Guide 2018

2018 Tax Reference Guide Federal Estate, Gift & GST Taxes Estate & Gift Tax Exclusion Amount for U.S. Individual (indexed) GST Tax Exclusion Amount for U.S. Individual (indexed)

Top Income Tax Rate: Everyone Else 40% YES, for Estate & Gift Tax Exclusion Amount

Top Trust & Estate Income Tax Rate Basis Step-Up?

Top Income Tax Rate: “High Income Taxpayers” (taxable income over $500,000 individuals; $600,000 joint)

37% (over $12,500) YES, for gifts at death

State Death Tax Deduction?

$15,000

Annual Exclusion – Non-U.S. Citizen Spouse (indexed)

$152,000

20% , if taxable income is less than $157,000 individuals; $315,000 joint. Otherwise, limited

20% LTCG & Dividend Rate: On LTCG and qualified dividends which results in taxable income over...

$425,800 single $452,400 HOH $479,000 Joint (1/2 for MFS) $12,700 Estates & Trusts

15% LTCG & Dividend Rate: On LTCG and qualified dividends which results in taxable income over...

$38,600 single $51,700 HOH $77,200 Joint (1/2 for MFS) $2,600 Estates & Trusts

0% LTCG & Dividend Rate

Hawai‘i Estate & GST Taxes Same day as federal return

Filing Extension Payment Extension Estate Tax Exclusion Amount (same as Federal Exclusion)

Granted if federal filing extended Granted if federal payment extended Same as Federal upon passing annual conformity bill

Top Estate Tax Rate Applicable GST Tax Rate Portability?

YES, for Estate Tax Exclusion Amount

Civil Union Marital Deduction?

YES

Gift Tax?

NO

Hawai‘i Income & General Excise Taxes Top Income Tax Rate

LTCG Rate

11%

7.25%

Top Dividend Rate

11%

General Excise Tax

4%

O‘ahu County Surcharge

Itemized Deduction Limitations: Mortgage Interest (debt on or after 12/15/17) Charitable Contributions of Cash State & Local Taxes Standard Deduction

AMT Exemption Amount (Indexed)

15.7% 2.25% x inclusion ratio

0.5%

10 -35%

Tax Deduction on S Corp, Partnerships, LLCs and Sole Prop “qualified business income” (QBI)

YES

Annual Exclusion (indexed)

Time to File

IRA & Pension Limits 37%

$11.2 million (est.)

Top Federal Estate/Gift Tax Rate Portability?

Federal Income Taxes $11.2 million

Personal Exemption

Anyone under the 15% breakpoint Interest on $750,000 60% of AGI $10,000

Catch-up Contribution for Employees 50 and Older

$6,500

IRA Annual Contribution Limit

$5,500

IRA Deduction Phase-Out (Based on MAGI for Taxpayers Covered by Workplace Retirement Plan)

$63,000 - $73,000 single, HOH $101,000 - $121,000 Joint

Roth IRA Deduction PhaseOut (Based on MAGI)

$120,000 - $135,000 single, HOH $189,000 - $199,000 Joint

AGI Limit for Retirement Savings Contribution Credit

$31,500 single, MFS $47,250 HOH $63,000 Joint

Tax-Free Charitable Roll-over from IRA for Individuals 70½ and older

$100,000

Hawai‘i Community Foundation Charitable Fund Types Donor Advised Fund/Signature Fund – Allows a donor (or someone the donor selects) the right to recommend grants from the fund over time.

An inexpensive alternative to private foundations.

$70,300 single, HOH $109,400 Joint (1/2 for MFS)

Designated Fund – For donors who want to support a specific charitable organization while ensuring the funds are utilized consistent with the donor’s wishes.

21%

Health Care Taxes Health Care Surtax: $200,000 of MAGI for individuals; $250,000 for Joint (1/2 for MFS); $12,500 for trusts

3.8% on the lesser of (1) net investment income; or (2) the excess of MAGI over the threshold amount.

Additional Medicare Surtax: On wages in excess of $200,000 single, HOH; $250,000 Joint (1/2 for MFS); not indexed

0.9%

Medical Expense Deduction Limitation

$18,500

$12,000 single, MFS $18,000 HOH $24,000 Joint

None, suspended

Corporation Tax Rate

Annual Contribution Limits 401(k), 403(b), most 457 Plans and Federal Government Thrift Savings Plan

7.5% of AGI

The information in this handout is provided “as is” and is for general educational purposes only. Hawai‘i Community Foundation, their respective employees, and agents specifically disclaim any and all liability and loss of risk incurred as a result of the use and application, either directly or indirectly, of the material contained in this educational handout, whether or not negligently provided.

Field of Interest Fund – Allows a donor to define one or more areas of charitable concern. The field may be as broad as “Maui County”, “girls & women”, “the environment”, or “health and welfare”, or as specific as “early childhood literacy”.

Catalyst Fund – This fund enables the development of strategies to grapple with important local challenges, strengthen leadership within Hawai‘i’s nonprofit community, and promote collaborative partnerships among donors to make the greatest impact.

Scholarship Fund – Provides post-secondary education scholarships to individual recipients. Grants may be awarded to the individuals or they may be awarded to educational institutions.

Charitable Gift Annuity (CGA) – A gift through a CGA to the Hawai‘i Community Foundation provides the donor and/or a loved one a fixed payment for life. At the death of the last annuitant, the remainder establishes a fund to fulfill the donor’s charitable wishes.