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Rendering: The New Tax Law

Finishing Well / Hans Scheil
The Truth Network Radio
March 23, 2019 8:30 am

Rendering: The New Tax Law

Finishing Well / Hans Scheil

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March 23, 2019 8:30 am

This tax season, returns might look very different for a lot of Americans. This week, Hans and Robby talk about what differences people 62 and older might see.


Social Security is the biggest difference for people in this age bracket. If your only income is Social Security, you will pay no income taxes on this money. If your other taxable income is small, you will pay some tax on that income, but still none on your Social Security benefit. Only when you reach higher levels of other income does your Social Security benefit become taxable. It is important to note that you will never be taxed on more than 85% of your Social Security benefit. You can lower the taxes on your Social Security if you plan ahead, especially by using money from a Roth IRA versus a traditional IRA.


If you do have money in a traditional IRA, which counts as taxable income when withdrawn, there is a way to take this money and avoid taxes. Using distributions from this account as a QCD, or Qualified Charitable Distribution, allows you to make donations directly from this account and qualify this money as nontaxable income. As Robby says, if you are already donating $100 or more a month to your church, you are over 70 ½, and you have a traditional IRA, you could be leaving a lot of money on the table.


Taxes are important, and it is important that you stay educated on all the aspects of your money in order to make sure you are paying only what is necessary, not any more.

Don’t forget to get your copy of “The Complete Cardinal Guide to Planning for and Living in Retirement” on Amazon or on for free!


You can contact Hans and Cardinal by emailing or calling 919-535-8261. Learn more at

Finishing Well
Hans Scheil
Rob West and Steve Moore
Finishing Well
Hans Scheil
Rob West and Steve Moore
Rob West and Steve Moore
Finishing Well
Hans Scheil

You're listening to the network and welcome to finishing well brought you by Cardinal Certified financial planner belonged to child, best-selling author and financial planner helping families finish well over 40 years of finishing well will examine both biblical and practical knowledge to assist families in finishing well, including discussions on managing Medicare IRA long-term care life insurance and investments and taxes. Now let's get started with finishing well how funds a day on finishing well with her five non-China were talking about rendering under God. You may remember the show on some rendering, but this week we want to talk a little bit more about what went rendering unto God the more I think about this thing on that. Seriously, if you're listening right with the new tax laws and if you're giving $100 or more a week to your church and if your age 70 1/2 or older and you have a traditional IRA so just you can check off the boxes you're given $100 or more, you church you're over 70 1/2 and you have a traditional IRA. If you're not doing a Q CD you're leaving $1500-$2000 on the table every year with the new tax laws and insist it's kind of that simple hello how are you in knowing what is this is just like a matter of stewardship like well there's $1500-$2000 more that you could be given to the kingdom or investing in your family are doing a lot of stuff with based on the new tax laws.

If you meet those criteria.

So this is just a critical thing well and in so there's one additional criterion is that you need to be in a position where you're using the standard deduction now under the new tax on this is the first year it's 2019. The were filing 2018 tax returns which is the first year of the new tax law and the standard deduction is now for a married couple, 65 and over $25,300 is 24,000 for people under 65 and so what what that's done is it's taken a lot of people who used to itemize deductions, and is now made their tax return much easier because they don't have to itemize. They just take the standard deduction and so there's a lot of folks that are really aware of this yet and what I meant and that is a lot of folks that are the receiving which would be churches and charities in people that depend and rely upon giving and the tax-deductible nature of it that are very worried about this new tax law is there, thinking of the people don't get a tax deduction for any more.

They won't give it they won't donate and I'm not sure that that's true, and especially at a time, as that was part of the reason for the title show really is by St. rendering to God's yet the people that are following God are given this money regardless everything to do with rendering on the Caesar casino obviously was yes. When Jesus gave this edict. If there was no tax to defendant in Julius's death from my standpoint they got the tax deduction that was what the 24,001s and the government saying okay I'm a give you your tax deductions ahead of time and so they're assuming everybody's given a check and then so they're giving you a big tax deduction, but you just not itemizing and say I think what you just said is that really the reality. I don't think that people really give based upon the tax deduction is silly when you read in the media and not talk to people their people worried about this and they're worried about people figuring this out and I actually don't think that is accurate. I think people are going to give with her to give what we want to point out is if you're one of these new people that isn't in itemize deductions anymore. Okay and you're still giving through your traditional way, which is put in 100 bucks a week in the basket every week in the collection and you have an IRA and you're over 70 1/2 or your parents are over 70 1/2 so and you tend to advise them and they look to you. Your you're missing out on something that just using that as an example could be an extra $1500-$2000 a year that you could give additionally to the kingdom. Or you could use it for some for yourself because that same person. If we were to go back two years ago five years ago before they did two CDs right that same person back then, let's say that itemize deductions, and they got $24,000 with the deductions in the got itemize all may think lined up in a deduction for that. What if there are no different place tax wise today than they were back then, but now with the Q CD.

Not only did they get all that benefit but now they also get that additional 1500 to 2000 to spend on the kingdom or to spend however you know God leads them to spend that which gets back to the real issue here is rendering the God. Okay, so what's a Q CD that you see the is a qualified charitable distribution is been around just a few years it's been around more than that, but every year they had to prove this part a lot now and so if you're over 70 1/2 in your subject to minimum distributions required minimum distribution. You can now give up $200,000 a year on your IRA and you can give it directly to the charity of your choice. So the church you can give it or you can give it to several churches or missions, but the maximum is $100,000 a year just tax-free sensor you're making a distribution from your IRA and your putting it to somebody or some institution that's can of further the kingdom, and you're paying no tax on that distribution as a grab.

It grabs me and so we want to remind our listeners that you're listening to finishing well of course brought to pride.

Cardinal and that I get right this time you got right Cardinal and of course it's all based on Johnson's book the complete Cardinal guide to planning for and living in retirement, which, if you go to Cardinal you can see of the books available there.

You can download free a PDF of today show, which is taxes in retirement, which is what were talking about today is one of the seven worries tab and you get that for your you can just email Hans and get the book.

But we also want to mention that you know you may be listening right now you go, man. I've fixed after going to Walmart and I really want to hear the rest of this you can go to Cardinal and click on the podcast and listen to this show are all of our passions. You know at your leisure. Even if you go to iTunes and subscribe after you want to listen to and if you don't want to do and ask your kids right Hans Smith that he had absolutely the sale out of subscribe and then you'll just get finishing well every sick single week right after the show upload. I listen to too many podcasts. I'm 60 I didn't listen to too many until our shows up. I listen to some occasionally things would interest me but once I became aware of this, I went to my kids that they have equipment all you do is you go to I you got a podcast tab. If you got an iPhone you have a button on their you push that and you go to the search function and you type finishing well for you type Hans child and Ami Boop. This is free and you can list of the seller pressures whatever works for you. So we want to give you all that information today show or talk about rendering under God specifically know what about taxes. You know when it comes to retirement is a lot different situations. As we are entering to the years of Social Security and we enter into the inner age where we got minimum distributions of our IRAs in these kind of things and so that's that's what gets us in a kind of the subject matter today, but Hans you made a statement as we are talk about the show today to me that is just extremely provoking statement was wealthy people with other assets have no business dying with Annie IRA balance. I mean, that's a pretty provoking statement.

Let me say again wealthy people with other assets have no business dying with any IRA balance so that would be if things are planned properly. If the really got professional to sit and look at this whole thing and simplified. That's part of what I do what's behind that is your hand and over IRA money. If you're leaving it to your kids tainted money.

Now leave that your spouse is fine because your spouses, live often have the same program continue and have a need for it even more because you're gone okay in your Social Security checks. So leaving it as a beneficiary to your spouse.

Let's make an exception from that.

But beyond that, I just have a lot of clients that are squirreling that IRA money and that's a big lion share their money and they're just naming their kids in the just point out the minimum distribution and that monies can go to their kids and there's a whole lot better ways intact. Smart ways to do and that's really what I mean yeah I am in the knowledge of my own situation. My father was an actually involve me but it did. My brothers and sisters in here is and he and I was shocked to find out oh my goodness he has always IRA at an end.

Then on top of that you know they were traditionally my IRA so that meant the tax thing was, and we did know the beneficiary is lilac show. We talked about. We got to the bottom who that is. But now you know these other siblings of mine when they get these that the first thing coming due or the taxes and you know just what I had come and do because they generally don't get good advice mean and and or and/or they need the money mean if they just flat need the money, which possibly a lot of them do.

If there's save $50,000.

There they don't pay taxes on all that so they're only going to get 30 or 28 or 32 so one of the strategies and again we we don't recommend that anybody does anything cost off-the-cuff based on what they heard on the show today. Actually that were not given advice hundreds of talking about situations, but when I think about my dad situation versus your friend the doctor who used his IRA money to buy life insurance policies which then and in fact paid all his children big sums of money tax-free. I just seemed like a whole lot better strategy close wonderful. Yeah it was a multiyear strategy in the week we took that was after we took care of long-term care with desire.

So we we took this IRA, which he really didn't need and then we broke it up and we took your long-term care. But what then what was remaining as we need all of it.

There is about 500 grand in there. We use 200 of it to secure long-term care and with the remaining 300 he still had to deal with that for the rest of his life. And so we just set it up word that the income that he pulled out of the annuity that we put it in then paid the premium on the life insurance of the ultimate thing was his kids got back are going to get back more when his wife passes away, and it comes in a check for no tax burden or any decisions to make with Edward Jones. Respect is is tax-free FRE either click and select okay.

We got a lot more on this rendering on the God stuff and and and the idea of you know God really gave us the stuff to to give us opportunities to be good stewards to see how we can leverage these assets for the kingdom and and that's what I loved about this show and when we come back got some more this, strategies was a tens of finishing well coming out of a certified management planner Hongqiao cargo kind Hans and I would love to take our show on the road to your church and Sunday school Christian or civic group. Here's a chance for you to advance the kingdom through financial resources and leveraging Hans expertise and qualified charitable contributions veterans aid and attendance IRA Social Security and Karen long-term care.

Just go to cargo and contact Tom to schedule a live recording of finishing well at your church Christian or civic group contact Tom Cardinal that's Cardinal we are back today on finishing well, a certified financial planner Hans Shiloh and today show rendering under God and ends in Hans you had the pie. We did have any coins that we had a dollar bill and and your talk about his pictures on those nights will yeah and so when when when Jesus was was was sitting with. Who was he said the Pharisees. He was a fair-haired transit tricking and assaying an unsightly rest when it asked the Pharisees when they held his picture is on this coins image yeah and you know he was Caesar's image that his father is any less recent rendering to Caesar and rendering to my father and what I that's the connection with the Scripture is the tithing to the church in the tithing to the kingdom and the tax deduction for the ties or the giving really. As far as God is concerned on everything to do with each other. God is fully capable of putting it on the hearts of his people. What's necessary to move the kingdom forward and and and I love the Scripture myself at the network.

The kingdom of God is forcefully advancing and forceful men take hold of it and so you know God's can get a hold of us and saying we wait. We need to get going about spreading the word of Christ. And what's going on and this can be done through resources and financial resources or want just one of the many ways that God does that and and so here's an opportunity, really, with the new tax laws to take it manage of what what is so upset, so let's get down to the $25,300 standard deduction for a couple, one thing I want to share with you is you even if you have a mortgage and perhaps a relatively small mortgage mediums that you know what, whatever the amount and then you've got other money is not IRA money just saving CDs something like that. Sitting here on the sidelines that you're not earning much you may want to give some consideration to paying off your mortgage because before 2018.

Back in 2017, 2015. You you you were getting a tax deduction for the interest you are paying on your mortgage. Now we still have the same to tax deduction available, but all of it all. Your deductions need to add up. If you're married over 25,300 if you're over 65 as well. And if you're single. It's like 13,000 and something if you're over 65. Solve all your deductions don't add up to that you're not really getting any tax deduction for that interest. Now if you don't have the money or it's not available or it needs to be there for some else and just scratch this idea. But if you've got some idle money. You may want to think about paying off your mortgage payment that is less interest. Her pain and numbness to get them is not tax deductible anymore. If your overall deductions don't add up to the 25.

So so that's a just a point and there are several little tidbits but we know we can save the tidbits for when we meet with you if you want to come see us. I want to stay on the big issues here on the on the show and I would like to talk about two CDs for just a sack. I want to make the point that if you're under 70 1/2 you might be that the adult child that mom or dad is saving that IRA money for in their gonna write it that there can enhance it. So first conversation with mom or dad is that they want to do their giving to the church. If there are over 70 1/2 out of that IRA so and they made not want to do that because her saving that for you.

But go ahead and empower them give it to the church's atrial tax efficient fact even give more if you can and then the second thing you may want to do is you may want to encourage them to go ahead and give more just like I said in that because it's it just when you inherit that that's gonna be somewhat of a problem far even you know have the discussion of mom and dad.

You may want to talk to somebody about that letter that IRA because there might be a better structure for you and just you know, write it off to my kids because it was my dad had that discussion for my siblings with you because it just could've been a lot more efficient way to to handle his estate in the way that it happened because when they inherit those IRAs into their gonna come with them all the tax implications of of what their intimacy and I will only speak one more time to the stewardship committee people out there in the pastors of the church that are very much watching this on a weekly basis. It's how they operate. There's a whole bunch of people over 70 1/2 that are set in a whole bunch of IRA money in your church that would love to give some of it may just on understanding and and they just don't and you might be hearing about for the first time he and so II would just say let's make them aware and we would be more than happy to educate anybody will even come out your church and record one of the shows. If that was. Now we must intimately be done it before we could do it again will bring the show on the road to your church or your Sunday school class are argumentative. Whatever it is that you would like to have us we would love to do it and and again engaged lots of folks with opportunities to leverage you know their stewardship towards the kingdom. That's what that's what were there for this wonderful and all you have to do is go to Cardinal and just email Hans you know I would like to hook up on this church, but while you're there, you might check out the seven worst tab in the income tax on in retirement is what were talking about today which is a PDF you get for free your email Hans for the free book again. You'll find a podcast page that was. We talked about earlier. If you were able to hear the hotel you just tuned in on you, so I don't know what I want to find out more about you.

CDs will just go to the podcast page and get the podcast information or search for it on iTunes and away you go here now that the next subject don't get to on this today is talking about income taxes on your Social Security. We talked about this in previous shows we can keep talking about the end for most retired people first about getting us a security check for most retired people is significant, and most of them can tell you can tell me what it is right out of their head. They don't even need to go look it up and pay when you get in retirement that so security check is very important and and and most married couples get to Social Security checks and that if people only live on their Social Security.

That's all he got you not pay any taxes on you so security and that's simple enough to understand is that the government is not gonna tax you when you're collecting that benefit. That's all you got how the next step up the ladder is you can have some other income that's taxable and you don't have to pay taxes on that some other income adjusted and pay no taxes on uses so I don't want to start throwing out a whole bunch of numbers with her somewhere around $25,000 for a single individual, and $34,000 of other income but included in that number is some your Social Security is on my book that actually in the workbook. It walks you through all these numbers and we use these when were planning and were looking forward at how people can draw their money. I just want to make the point that is possible with some good planning to pay no taxes on your Social Security still have other income and pay little or no taxes on that unless you have a need for 100 hundred 20 $550,000 a year submitted as a has a high need or hidebound when it where you want to call it is they need to live off of money at that level and they don't have a bunch of money sitting on the sidelines that they can draw from and they got a drawing of an IRA.

If you have a high income need.

Then you can pay taxes on both you and pay taxes on your Social Security not on hundred percent of it been a good bit of it and then you can pay taxes on your income and so if you have a high income. Certainly we can do a lot of things in financial planning but there in much we can do about the taxes on Social Security. If you have a moderate income.

In addition to Social Security those of the people we can really help by bringing their Social Security down zero tax so that doesn't sound really exciting, but not near as exciting as given to the kingdom to skew CDs that I want to get that in there and and so if you run across a story or people didn't understand that Hans and all of a sudden found themselves in a pan. Taxes on so security didn't really have to go all kinds of mean or just where they were smart enough to come in and begin a financial planner at retirement and they came in the door, belittling Social Security because they got a good amount of money and instead and expect much out of that and then we show him how much it is the Social Security and then we shown how much tax they can have to pay on it. If they just spend freely out of this IRA.

So that's how we get their attention and I I've got a number of clients like that and then what we do is one of the ways you can work with this when you're when you're in retirement is if you do have some not IRA nonqualified is what were to call it savings you can draw that down a little bit every year. And that's not the sharpest taxable income. So if we got three buckets of money to draw from Social Security and then IRA and then a nonqualified savings. We don't have any control over the Social Security but this bucket two and bucket three we we have control in any year by year which one we pull from and how much we can sit down and project all of this and future tax rate at an acceptable level. Want one my best questions that I asked people, especially that have some significant money is what what level of taxes acceptable to you, and I'm betting they say none well-educated to Santa Rosa for a minute as they have to think for a second, like you, well you know I get all kinds answers people get whatever the law makes me pay or something on some say you know less is better than more people come up with all kinds of answers but it's my way of putting into their mind that to some extent if you got three Trevino three buckets of money. One of them being Social Security you got the other two buckets of money that you saved for it to some degree were in control right and in the idea being that you have options and and. And therein lies the opportunity whether it the children or the parents you know is is that you have options which is what a lot of what financial planning and NIE stewardship is all about what is and see that he gets even more difficult when we go back to the beginning of the show where I said that you know when you pass away you don't want any money in your IRA will now you got a different competing objectives of we got people in their 60s. They want a low tax, but we got people in their 80s after they work with me. They want to have nothing in their IRA and their other money and so we got a lot of competing objectives.

That's that that's what we do is we figure out which can be best for you and your family and all those things are all different and so you can see it it's it's an interesting thing in finding somebody you can trust is is a big part of that again. You can find Hans at Cardinal guide you got to remember put the guide.

After Cardinal Cardinal like the bird and again just go to seminary stabbing get the stuff regrow the podcast if you get to hear the rest of today show, but most of our disgraceful rights that you live in today were thankful for each and every 1 mile in my office is in Durham again office in Greensboro by the airport again office in Charlotte so we can meet you if you're in North Carolina.

Those locations, we can meet face-to-face from. We hope you enjoyed finishing well brought you by Cardinal visit Cardinal for free downloads of the show previous shows on topics such as Social Security, Medicare and IRAs, long-term care and life insurance, investments and taxes as well as constant best-selling book, the complete Cardinal guide to planning for and living in retirement and the workbook once again for dozens of free resources past shows when you get Hans book go to Cardinal if you have a question, comment or suggestion for future shows. Click on the finishing well radio show on the website and send us a word. Once again that's Cardinal Cardinal

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