The Tax Cut and Jobs Act, which went into effect Jan. 1, 2018, will affect most people in the country. The impact may differ for each person or family. Almost everyone will have lower tax rates, the standard deduction has doubled, and the child credit has increased. However, the personal exemptions are gone and many deductions have been reduced or eliminated for those who itemize their deductions.

Download overview of what you need to know about the tax law changes.

Here are key steps to take:

  1. Determine the specific impact the tax law will have on you by consulting your tax advisor.
    The IRS has issued new withholding tables and you should determine whether those amounts are appropriate in your circumstances.
  2. Understand changes in charitable contributions.
    With the higher standard deduction, many people may not need the deduction for their charitable contributions. So, you might consider “bunching” your charitable gifts every few years, instead of making your gifts each year. Using a donor advised fund at a community foundation can help facilitate this periodic giving.
  3. Evaluate a charitable rollover.
    If you are age 70 1/2 or older, you might consider making a charitable rollover directly from your IRA to your favorite charity. This avoids the tax on your required minimum distribution.
  4. Assess your estate plan.
    The federal estate tax exemption has been raised to $11.2 million per person, so most people won’t have to worry about federal estate tax now. Minnesota’s estate tax exemption has increased to $2.4 million this year, but is still quite a bit lower than the new federal amount. You should consult your attorney to see whether any changes are needed to your estate plan.

Download overview of what you need to know about the tax law changes.