COMMUNITY NEWS
The Jewish Federation of Greater Philadelphia mobilizes
financial and volunteer resources to address the
communities’ most critical priorities locally, in Israel and
around the world.

W Tax Planning News and Ideas
for 2022 Year End
hile there is always talk of changes in the taxes applicable to
individuals, little has actually changed this year so far. The
“Inflation Reduction Act” (Public Law 117-169), a slimmed-down ver-
sion of “Build Back Better,” did not include many of the individual tax
changes that the Biden administration originally proposed. The act,
however, does include tax incentives relating to green energy.

Legislation aimed at boosting retirement savings gained signifi-
cant traction in the House and Senate this year and was enacted in
October. As a result, the annual retirement contribution amount was
increased for retirement plans and catch-up provisions (for those age
50 and over) as well as Individual Retirement Accounts.

In addition, the following legislative proposals have been under
consideration by Congress:
• Expansion of the universal charitable deduction for nonitemiz-
ers. Proposed legislation (S. 618 and H.R. 1704) seeks to expand
the universal charitable deduction first enacted in the CARES
Act, the COVID relief legislation passed in March 2020. The
proposed legislation would allow a charitable deduction of up to
one-third of the standard deduction available to nonitemizers
(about $4,000 for individual filers and $8,000 for a joint return).

In addition, it is possible that a year-end tax package could pro-
vide an “above the line” deduction of $300 ($600 for a joint return) similar
to what was available for 2021.

• Expansion of the IRA Charitable Rollover. Bipartisan legislation that has
passed the House (the Securing Strong Retirement Act, H.R. 2954) has
been introduced in the Senate (Enhancing American Retirement Now Act,
S. 4808). It would make changes to the IRA Charitable Rollover regime,
indexing the current $100,000 rollover amount for inflation and permitting
one-time transfers to charitable remainder trusts and gift annuities of up to
$50,000. Key considerations for year-end tax planning
Courtesy of Getty Images
• Use appreciated assets to make a charitable gift in 2022. As in previous
years, gifts of appreciated assets (stock) remain a best practice. Such gifts
not only provide a deduction to the donor but also avoid the capital gains
tax. Conversely, built-in loss assets generally should be sold (generating a tax
loss) with the resulting cash proceeds donated, if desired. Note that, as in
previous years, up to $3,000 of capital losses may be used to offset ordinary
income. • Consider donating to a donor-advised fund for maximum flexibility. If you
are considering making a significant donation to charity over time but want
a deduction today, consider adding funds to an existing DAF or opening
a new DAF. It can be especially beneficial to donate appreciated property
because by doing so capital gains taxation with respect to the contributed
assets is eliminated. The Jewish Federation of Greater Philadelphia operates
donor-advised funds and would be happy to assist.

• Look into an IRA charitable rollover. The IRA charitable rollover is an
attractive option because it can help satisfy the minimum distribution
requirement without incurring income tax, even if you don’t itemize your
deductions. If the proposed legislation expanding the amount and nature of
rollovers is enacted, this option will become even more attractive.

• Consider taking advantage of energy incentives in the Inflation Reduction
Act. There are new and recently expanded and extended green energy incen-
tives provided by the Inflation Reduction Act, including the tax credits for
rooftop solar panels, insulation, electric vehicle purchases and energy-effi-
cient home improvements. Each of these incentives has somewhat complex
rules, and some do not go into effect until 2023, so careful research is
required. • Consider accelerating noncharitable gifts. The unified estate/gift credit of
$12.06 million is scheduled to automatically reduce to around $6 million
beginning with transfers made in 2026. Accordingly, taxpayers who intend
to make significant gifts (either during their lifetime or in the form of
bequests) may want to consider accelerating some or all of those gifts.

• As with any significant tax and charitable planning, it is advisable to care-
fully consider potential changes in the context of your complete financial
profile and to consult your tax adviser.

Endowment professionals at the Jewish Federation of Greater Philadelphia
remain available to work with you and your other professional advisors to max-
imize the benefits of these and other tax-planning strategies for you and the
Jewish community. For more information, contact Jennifer Brier, director of
planned giving and endowments, at jbrier@jewishphilly.org or 215-832-0528.

JEWISHEXPONENT.COM 9