March 2021
Information on Tax and Estate Planning from the Masonic Charities of the Grand Lodge of Pennsylvania Due to the COVID-19 crisis, all travel and events are suspended until further notice.
2021 Tax Update Two things we can never avoid are death and taxes. Our last issue dealt with preparation for the “death” scenario, reminding you of the importance of completing or updating your will. With a new administration now in Washington, D.C., we will address taxes for 2021. Here are the highlights: 1. Non-itemizer charitable deduction for cash gifts - The nonitemizer charitable deduction has been extended for 2021. In addition, the deduction has been enhanced to allow $300 for single filers and $600 for married couples filing jointly. This is available to taxpayers who take the standard deduction, which are most of us in the country. This tax deduction is limited to cash gifts to qualified charities like the Masonic Charities (supporting organizations and donor- advised funds do not qualify). So, everyone should give at least $300 to their favorite charity each year. 2. Dollar-for-dollar deductions for cash contributions, if you itemize - Contributions to public charities have historically been limited to a percentage of a taxpayer’s adjusted gross income (AGI). The CARES Act lifted the cap on annual contributions for those who itemize, increasing it from 60% to 100% of AGI for 2020 (and now, for 2021). Any excess contributions available can be carried over to the next five years. 3. Federal Estate Taxes - For 2021, the exemption for estate and gift taxes increases slightly to $11.7 million from $11.58 million per individual, or to
$23.4 million for a couple. Right now, there is a lot of chatter about a drastic decrease in the exemption under the Biden administration (rumor has it that it could be anywhere between $3.5 million and $5 million per individual). For those who may be affected by this change, this might be the time to talk to your tax advisor about doing some larger lifetime gifts to heirs and/or charity before the exemption decreases. 4. Federal Gift Taxes - For 2021, the annual gift tax exclusion remains at $15,000. You can give gifts of $15,000 to as many individuals as you would like. Any amount in excess of $15,000 to any individual (or $30,000 for a married couple) will require filing a federal gift tax return, applying such excess against your lifetime exemption. 5. Standard Deduction Limits - The standard deduction for 2021 increases to $25,100 from $24,800 in 2020 for individuals who are married and file jointly. The rates for single filers increase to $12,550 in 2021 from $12,400 in 2020. For those filing as the head of the household, the deduction increases to $18,800 in 2021 from $18,650 in 2020. For individuals over age 65, there is also the additional $1,300 deduction.
Refresher on Taxation of Traditional IRAs Over the years, the IRA has become the predominant asset in many individuals’ estates, especially for those who roll over their retirement plans into an IRA. For those with a traditional IRA, here is a short primer of what you need to consider with your IRA, both during your lifetime and at death. 1. If you are over age 70½, the qualified charitable distribution (QCD) is the best way to give to charity for most individuals, hands down. You don’t have to itemize your taxes to get the tax savings, and you can reduce your taxable income if your QCD is part of your required minimum distribution (RMD). Call for our QCD Kit if you want more information on this tax-saving method of giving. 2. Remember that not all assets you own are the same for income tax purposes. Any distribution from a traditional IRA is taxable as ordinary income to you during your lifetime and your heirs when you die. There are only two ways to escape this tax problem: a) Make IRA distributions as a QCD to charity during your lifetime (but you have to be over age 70½) or b) Distribute the IRA to a qualified charity or a charitable remainder trust at your death. 3. Under the SUCCESS Act, with limited exception, any IRA you leave to an individual other than your spouse has to be distributed within ten years after the year of your death. This could have serious income tax implications. However, a tax-free distribution of your IRA to a charitable remainder trust at your death permits your heirs to receive a percentage of the trust assets for their lifetimes, with any remaining funds left upon the death of your heirs going to Masonic Charities. We call it the “Income for Life Trust” or “Give it Twice Trust.” Our Gift Planning Office can establish this trust for you now and administer the trust for your heirs upon your death. We do not charge a fee, and you can change your mind
anytime during your lifetime. Call our office for your free Give it Twice Trust Kit to learn more. 4. If you are charitably inclined at all, make sure your professional advisor works with you to give the right assets to charity and the right assets to your heirs. Failure to do so could result in your heirs paying much more in taxes than they should. For more information on giving with your IRA, please see my three-part video series at masoniccharitiespa.org and click on the “News” tab, or call or email me with your questions. You worked too hard all of your life to give your IRA away for taxes, so make sure you get it right.
Planned Giving Website Update Please visit our new planned giving website at masoniccharitieslegacy.org, where you can get your free estate planning guide and find information on various ways to give to Masonic Charities while receiving income for your life and/or your heirs’ lives. There is also current tax news available at the site and links to each of the Masonic Charities’ giving sites. It is a great way to learn how to do your own estate plan and explore options to help one of your favorite Masonic Charities at the same time. You can also sign up for the enewsletter, which features news from Washington, D.C.; Savvy Living; gift stories; finance news and timely articles.
Neither Masonic Charities of the Grand Lodge of Pennsylvania, nor Alvin H. Blitz, Esq. provide legal, financial or tax advice. None of the information in The Blitz should be deemed legal, financial or tax advice or acted upon by any person without prior consultation with appropriate professional advisors.
Support the New Masonic Temple Lighting Project The splendor and tradition of Freemasonry is exemplified in the magnificent Masonic Temple in Philadelphia. I ask you, Brethren and ladies, to consider this your opportunity to exclaim, “Let there be light!” once again by supporting the illumination project for the Masonic Temple. Downtown Philadelphia has been illuminating key buildings, including City Hall, since 2004. Now, the project is expanding to the beautiful buildings on the Avenue of the Arts, and the Masonic Temple is set to lead the way. The Masonic Temple/Library and Museum is seeking contributions to underwrite this $300,000 project
for installing cost-effective, lower maintenance, light-emitting diode (LED) fixtures to provide a nearly infinite array of possible patterns and colors to illuminate the Masonic Temple‘s intricate and majestic façade. Besides cash contributions, you can make stock gifts, QCDs and even planned gifts to help make this project a reality. I urge your support for this once-in-a-lifetime project to illuminate the home of one of the grandest Masonic jurisdictions in the world. Please reach out to me by phone or email to discuss how you can help. Naming opportunities are available for interested donors seeking to make significant contributions. You may also contact Joyce Michelfelder, located at our Lafayette Hill office, at 610-825-6100, ext. 1348, for further information.
1-800-599-6454 | MasonicCharitiesPa.org
Masonic Charities One Masonic Drive Elizabethtown, PA 17022
March 2021
As Chief Gift Planning Officer for the Masonic Villages in Pennsylvania, Alvin H. Blitz, Esq., serves the Masonic Charities of the R.W. Grand Lodge of Pennsylvania, which consists of the Masonic Villages, the Masonic Children's Home, the Pennsylvania Masonic Youth Foundation, the Masonic Library and Museum of Pennsylvania and the Masonic Charities Fund. Attorney Blitz holds a Bachelor of Science degree from the University of Scranton, a Master of Arts degree from Fairleigh Dickinson University, and a Juris Doctorate from Dickinson School of Law. He has given estate planning seminars throughout the country and is a member of Carlisle Lodge No. 260, Carlisle, Pa. Contact Alvin Blitz: 1-800-599-6454 or ABlitz@masonicvillages.org