The elimination of Miscellaneous Itemized Deductions that are subject to the 2% floor under the Tax Reform Act applies to Estates and Trusts.  This includes Tax Preparation fees (unless they can be allocated to Schedules C, E, or F), Fiduciary fees, Investment advisory fees, or Asset management fees. 
 
There is an exception to the 2% floor for Administrative costs that are paid or incurred by an Estate or Trust and that wouldn’t ordinarily have been incurred if the property weren’t held in an Estate or Trust.  This is an important distinction because Estates and Trusts can incur large Tax Preparation and Fiduciary fee expenses for the management of Estate or Trust assets.  To this point, the IRS has released proposed regulations that confirm the tax reform act elimination of Miscellaneous Itemized Deductions does not eliminate expenses that were previously deductible under IRC §67E. 
 
Therefore, for tax years beginning after 12/31/2017, administrative expenses are still fully deductible on Fiduciary returns.  The regulations also state that the appropriate portion of bundled fees is still deductible.  So, if a portion of the fee is attributable to Administrative expenses, then it is still deductible.
 
Prior to the tax reform act, in the Final year of an Estate or Trust, beneficiaries were also generally allowed to take deductions in excess of 2% of gross income on their 1040.  For tax years beginning after 12/31/2017, these deductions are no longer allowed.  Trustees and Executors should consider when to pay expenses in order to avoid lost deductions.  For example, it might be beneficial to prepay the cost of preparing the final Estate or Trust tax return in a year prior to the final distribution if the deduction for that expense would otherwise be lost. 
 
The proposed regulations don’t clarify this issue, but they do state that final regulations will address the ability of beneficiaries to deduct expenses that would have been deductible on the Estate’s or Trust’s tax return after the termination of the Estate or Trust.  But, as of now, there is no timeframe for when these final regulations will be available.

How to get the greatest tax deduction
The first question to ask is, "With the increase in the standard deduction, will I still benefit by itemizing my deductions?" If not, you may, in effect, lose your charitable contribution deduction.

There are several ways to continue donating to your favorite charitable organizations and still get a tax deduction. 

Charitable contributions are one of the few deductions enhanced under the Act, which increased the AGI limitation on cash contributions from 50% to 60%. That means that you can contribute and take a deduction for up to 60% of your adjusted gross income.

High Income Individuals
Under the old law, charitable deductions were subject to limitations.  For those with high income, these limitations reduced their deductions by 3% for every dollar of taxable income over certain thresholds and ultimately up to 80% of their itemized deductions.  The new tax law repeals the limitations!  Those high-income households can now donate and get the full deduction, no matter how much you earn.

Retired Individuals
If you are over 70-1/2 years old, you should make your charitable contributions directly from your IRA account. You can contribute up for $100,000 per year using a Qualified Charitable Donation (or QCD).  

If you are younger, there are other ways to make your charitable contributions deductible such as through a Donor-Advised Fund.  Other strategies involve bunching your giving into years.

Have concerns or need advice to maximize your charitable deductions?  Contact our Tax Team for a review of your Itemized Deductions and Charitable Giving strategy.