Memorial & Endowment
Women & Money
A Workshop Sponsored by Memorial & Endowment February 24 d 10 – 11:30 AM.
The Committee for Memorial & Endowment will sponsor a workshop in Fellowship Hall specifically for women to help with strategies for planning for retirement and the future. This workshop is for women of all ages and in all stages of life – whether you have a partner or are the sole provider, this workshop, lead by Brian Purcell, will provide valuable information to make the most of your earnings. Already retired? Or just starting a new career? Please plan to join Brian in Fellowship Hall on February 24 for this informative session.
Understanding the New Pension Law
For the second time this year, we’ve had major tax legislation (the first was the Tax Increase Prevention & Reconciliation Act passed in May). What does the newly enacted Pension Protection Act mean to you and me?
The pension-reform bill contains a couple of interesting new provisions that affect charitable giving. First, Congress is sticking its nose in the quality of what we give away. If your donated clothing or household items aren’t in “good” condition, you won’t get a deduction. But of course, no one has defined what “good” condition is. Presumably it means you won’t be able to donate stuff that really belongs in the trash.
Second, if you don’t have written documentation for any cash gift, you cannot claim a deduction. Gone are the days you can throw $20 in the offering plate and claim it on your taxes. You’ll need to use offering envelopes or you can’t write it off.
Finally, there is good news for seniors over 70½. You can give up to $1000,000 in 2006 and 2007 directly from your IRA to a qualified charity. (You can do this with your required minimum distribution.) That money will not be counted as taxable income.
There are a few caveats with this last charitable strategy:
w No one under the age of 70½ can take advantage of these new IRA giving rules.
w While the law permits you to give to charity directly from your IRA, it doesn’t require IRA administrators to accommodate your request. Some IRA providers may balk at making millions of $10 and $20 gifts.
w Since the gift isn’t counted as income, it won’t matter if you itemize deductions on your tax return.
w Gifts must be taken from traditional or Roth IRAs, not 401(k)s or 403(b)s or other types of defined contribution plans and not from SEP or SIMPLE plans.
See your financial advisor for complete details.
Memorial & Endowment
A Gift with Double Dividends
In several ways, a United Church of Christ Gift Annuity is a gift that creates “double dividends,” providing benefits for both the Church and the donor! Consider some of these double benefits:
w A Gift Annuity provides lifetime income to the donor…
And future income to the Church
w A Gift Annuity may provide a charitable deduction to the donor …
And offers the Church the donor’s witness of generosity as a stimulus for ongoing education regarding stewardship of accumulated assets.
w A Gift Annuity gives the donor the satisfaction of making a significant contribution to the future mission and ministry of the Church…
And gives the congregation a means of building its endowed funds to fulfill a vision of mission and ministry beyond its annual giving.
For more information about the double dividends that a UCC Gift Annuity can provide you and your congregation, contact Brian Purcell of the Memorial & Endowment Committee at (707) 575-6373 or contact the UCC Financial Development Ministry directly by phone at (800) 846-6822 or by email at giving@ucc.org.
Are you 70.5 years or older?
At the last meeting of the Memorial & Endowment Committee, it was suggested that every monthly newsletter should include information about church finances and its relation to individual members.
The new Federal Pension Act of 2006 was just signed on August 8, 2006 and provisions are available for new deductions, which are allowable on your 2006 1040 tax form.
Charitable IRA Distributions
Up until the end of 2007, if you are charitably inclined and wish to give some of your IRA funds to a charity, you can withdraw up to $100,000.00 from your IRA tax-free and give it to a charity. You do not receive a tax deduction but you also do not need to report the withdrawal as income. A tax infested IRA is the best asset you can give to charity. This new provision allowing Qualified Charitable Distributions only applies to IRA owners age 70 ½ and older and only applies to outright IRA gifts to charities and not to grant making foundations, donor advised funds or charitable gift annuities. Better move fast as this one provision of this Act expires after 2007.
The big incentive here is that the charitable donation from your IRA will satisfy your required minimum distribution (RMD). You won’t have to pay tax on the amount of your required distribution that you give to charity. This can lower your income and may even cut down the tax you pay on Social Security Income, not to mention the loss of tax deductions, exemption and tax credits that are lost when your income is increased. So if you normally make donations anyway, you should make those donations from your IRA and reduce your income.
This provision is especially good for those of you who do not itemize your deductions (you take a standard deduction) and would not normally be able to deduct gifts to charity. By not having to report the income from the IRA distribution, you effectively receive a deduction that you would not otherwise have been available to you. Under this provision, the donation must be made directly from your IRA to a charity without you or anyone else touching the money in between.
Memorial & Endowment, Winfield H. Hughes, C.P.A.
