Happy New Year! I trust you had a good Christmas with family and friends and brought in the new year in style this past weekend. My family had a great time together and a relaxing time away from the routine for a few days. It is always nice to be away and relax.
Before the Christmas break Congress decided to get some work done. The large tax bill just passed by Congress resurrects an expired provision allowing special charitable donations of individual-retirement-account assets for taxpayers 70½ and older. This includes giving to churches.
According to the Wall Street Journal “The provision itself is simple—at least as tax rules go. It allows a taxpayer who is 70½ or older to contribute a total of $100,000 in IRA assets to one or more qualified charities. The payout can satisfy the required minimal distribution. The donor gets no deduction, but neither does he or she have to report the payouts as income.”
The WSJ goes on to say “That last point is key: If the donor had to claim the payout as income and then deduct it, there could be problems. The deduction itself could be limited because of other tax rules, or else the donation might swell the donor’s reported income, possibly raising Medicare premiums or taxes on Social Security payments. Instead, the donation bypasses tax calculations altogether.” Read more…
Your church needs to take advantage of this new extension. If you do not promote this new tax break to your congregation you will be making a tactical error. This only affects a certain group of people (70.5 and older) but it could make a huge impact on your budget for 2011 and/or for your capital campaign giving. The interesting part of this is that if they give before January 31 they can get the tax break for 2010. They can then use this tax break again for 2011 giving.
Please plan to promote this to your people. You will need to get the communications out no later than Tuesday, January 11 in order for your people to have the opportunity to act upon this tax break by the end of January 2011. Your people will need to contact their financial professional to guide them through this process. This is NOT something your people will need to try and navigate on their own. If you need a sample letter to communicate this tax revision for your 2011 budget process, use this one. If you are in the giving phase of a capital campaign you may choose to use this letter to communicate the tax changes.
Please contact me if you need more guidance. 404-435-5755. firstname.lastname@example.org Please share this message with others in your church or friends in other churches by using the share this button(s) at the top of the page.
Happy New Year!