2018-01-31 / Columns

Let me introduce myself…and talk about everyone’s favorite—taxes

MONEY MATTERS
LEONARD GLICKMAN
Executive Director, Jewish Community Foundation

Dear Voice readers,

I am honored and excited to have started my role as executive director of the Jewish Community Foundation, Inc., this past month. I look forward to meeting you and learning about your interests in tikkun olam, legacy giving, and securing the future of the Southern New Jersey Jewish community.

For those who are curious, I invite you to read about my background at jcfsnj.org/transition, or I welcome you to contact me at (856) 673-2541 or lglickman@jfedsnj.org. I would be glad to chat.

For this month’s column, I thought I’d discuss everybody’s favorite subject: Taxes!

Tax season is approaching, and there have been many changes in tax laws. As a refresher, and while some of these changes are not directly related to philanthropy, here’s a review of some of the reforms, starting locally in New Jersey, effective January 1:

• The sales tax rate is now at 6.625%, down from 7% two years ago.

• The estate tax exemption, previously set at $675,000, and then increased to $2-million last year, has been completely phased out; now, any property transferred (inherited) will not face an estate tax liability.

• The retirement income exclusion is increasing in steps through 2020, topping off at $100,000, meaning that many retirees will no longer pay New Jersey income tax.

Overall, these tax law revisions should mean that more New Jersey residents will pay less in taxes in 2018 and subsequent years than before, so that should be a net positive for most of us.

With respect to the Federal tax reforms, Congress enacted changes through the Tax Cuts and Jobs Act of 2017. Very briefly, tax rates are reduced for individuals and corporations, while doubling the standard deduction, and eliminating personal exemptions. Scores of other changes were enacted. To learn more about them, Google “tax reform 2017 changes” and you’ll find many helpful articles with more details.

The minutiae of the Federal and state tax reforms reach beyond the scope of this column (as always, check with your trusted tax advisor for more information), but the end goal of these changes should mean that the average person should pay less in taxes and have more money in his or her pocket, at least in the near term.

That said, we should note that some surveys show that most donors will no longer benefit from earning charitable deductions on their taxes (since fewer people will itemize their deductions), but most donors give to charity not because of tax deductions. According to U.S. Trust’s 2016 Study of High Net Worth Philanthropy, for example, the number one reason why survey respondents give to charity is because they “believe in the mission of the organization.” Receiving a tax benefit was ranked seventh.

Having worked in the nonprofit industry for over 20 years, I know the incredible work that is accomplished every single day by non-profits of all sizes, and I have seen in person that people indeed love to give to charities in whose missions they believe.

To that end, if you want to ensure that your synagogue, day school, Federation agency, or other non-profit can secure an annual income stream, I invite you to consider establishing an endowment fund or donor advised fund with the JCF. Your endowment fund, no matter the size, can ensure that your chosen organization can continue to provide vital programs and services regardless of the economic or tax landscape. It’s tikkun olam at its best since your gift lasts for many future generations.

Want to chat about this? I welcome the opportunity talk with you. And it doesn’t have to be about taxes!  lglickman@jfedsnj.org

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