Taxes & Charitable Donations

Taxes & Charitable Donations

Taxes and Charitable Donations

We need and appreciate each individual and family supporting our congregation. Your generosity makes it possible for Beth Shalom to meet the needs of our sacred community.  For those who are able, your additional donations truly make a difference.  There are many ways you can contribute.

RMDs from Retirement Accounts
If you’re over age 70 1/2, you know that you must start taking required minimum distributions (RMD’s) from your retirement accounts.  What you may not know is that you can make tax-free transfers from your IRA to charity (i.e. CBS) and have that count as your RMD.  If you’re over 70 1/2, you can transfer up to $100,000 tax-free from your IRA to qualified charities each year.  These qualified charitable distributions (QCD’s) must be transferred directly from your IRA to the charities in order for them to stay out of your Adjusted Gross Income (AGI).  Besides lowering your overall taxable income, keeping your AGI lower can also help you avoid paying higher Medicare premiums as well as lower taxes on your social security benefits.  If you are interested in taking advantage of this strategy it is important that you contact your IRA administrator as they all have their own processes to ensure compliance with the IRS rules.  Some require you to fill out a special QCD form while others allow you to write a check directly from your IRA to the charity.  It is also important to bear in mind that these distributions do not qualify as tax-deductible charitable donations.  Also, this does not apply to Roth IRA which has tax-free withdrawals and no required distributions.

Stock and Mutual Fund Donations
Did you know that you can donate your appreciated shares of stocks and mutual funds to the shul?  From 2013 to now, members have transferred over $262,000 (!) worth of appreciated securities to Beth Shalom to satisfy their dues obligations, High Holiday, Fundraising and 50th Anniversary pledges.  With many stocks and funds at or near record highs and the end of 2019 approaching, this seems like an excellent time to transfer appreciated securities to Beth Shalom.  The process is simple and quick and there is no charge for the transfer. Emma in the office will be happy to assist you with the transaction.  Your charitable donation is equal to the value of the shares when you transfer them and in addition, because you are donating and not selling the shares, you pay no capital gains taxes!  This is a rare situation where you receive 2 tax benefits – a charitable deduction and avoiding tax on the appreciation in value of the donated shares.

Just a couple of caveats, you can only donate stock and mutual fund shares that you’ve held for more than a year and the proceeds can only be applied toward tax-deductible items like dues, donations and pledges and not tuition payments.  Lastly, it would not be beneficial to donate shares that have not appreciated.  In that case, sell them first and then donate the proceeds.
The process is simple and quick but does take SOME time so to be sure that your stock donation is completed in the 2019 calendar year please plan to transfer your shares ASAP!
Because everyone’s tax situation is different, this should not be construed as tax advice.  If you have any questions you should read IRS Publication 526 and consult your tax professional.
This article should not be construed as tax advice.  Please contact your tax professional to discuss which of these strategies will work best for you given your own unique financial situation.

Tax Law Change – What does it mean for charitable giving?
The US Tax Code has many changes in store, and while there’s no way of knowing what the final version will be, almost all of the versions making their way through Congress include a doubling of the standard deduction, and many include loss of some deductions that those who itemize have taken advantage of for years.
The estimates are that many fewer Americans will be itemizing their returns, which means that the deductions  you may have been able to claim over the past few years may not bring you over the threshold where itemizing is necessary. However, these are still deductible on your taxes if you itemize this year.
What does that mean? Of course, you will want to consult your own tax advisor, but if you currently have a balance with Congregation Beth Shalom, it may be advantageous to pay it this year, rather than wait until after January 1st.

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