Making gifts at year-end is a holiday tradition for many. It’s a season full of wonder and reflection. It is a time that we may be especially grateful for the blessings that God has bestowed upon us. You may wish to complete your pledge or simply to express your gratitude to God and to support the mission and ministry of Northminster.
In considering a year-end gift, you may want to consider the type of assets that will be most effective for your situation. The following is a brief overview of your options. You are encouraged to speak to your financial advisor for your particular situation.
Considering which assets to give and in what forms to give them can be challenging. All donations to Northminster must be made by December 31, 2019, to count as deductions for this tax year. Northminster accepts gifts of stock and securities. Distributions from IRAs can be donated, so long as certain conditions are met.
Types of assets for year-end gifts:
Cash – This is the most common charitable gift. It comes in the form of checks and electronic transfers. If you are eligible to itemize your tax deductions, gifts of cash may be used to eliminate federal income tax on up to half of your adjusted gross income. You may also be eligible for state income tax savings. Cash donations must be received, or post-marked before December 31st to count for this tax year.
Appreciated Securities – Using appreciated securities can provide you with additional tax savings since you do not realize long-term capital gains. The value at the time of the donation, rather than your cost, may be reported as an itemized deduction. Appreciated securities include stocks, bonds and mutual funds, among others. Donations of stock to Northminster are done through the church’s Schwab brokerage account. For safety reasons, that account information can’t be included here, but contact Pastor Michael, Treasurer Tom Abendroth, or Financial Secretary Athina Sato for this information.
Qualified Distributions from IRAs — At the close of 2015, lawmakers approved the Protecting Americans from Tax Hikes Act. A provision of this law made Qualified Charitable Distributions from individual retirement accounts permanent. This is good news for Presbyterians who want to support their congregation and receive tax benefits for doing so. A charitable distribution to Northminster meets the qualifications if it meets all of the following criteria:
- Donor must be 70½ or older at the time the distribution is made.
- The distribution must be an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA).
- The distribution must be made directly to Northminster. (Your plan administrator will have the necessary forms and know the proper procedure for making a gift from your plan.)
- Donors are limited to $100,000 annually.
- The charity receiving the gift must provide donor proper substantiation of the gift. (Northminster provides such substantiation.)
There are many potential benefits to giving from an IRA.
- The donation may potentially satisfy required minimum distribution in the year the qualified charitable donation is made.
- The donation amount is not included in the donor’s adjusted gross income, helping to potentially avoid increased taxes on social security income, higher Medicare premiums, and the loss of deductions/exemptions.
- Giving in this way provides donors that use the standard deduction a potential tax break for the contribution.
Again, for account safety the necessary information can’t be included here, but please contact Pastor Michael, Treasurer Tom Abendroth, or Financial Secretary Athina Sato for the necessary information you need to make a gift from your Retirement Account.
This is modified from materials prepared by The Presbyterian Foundation.