Required Minimum Distributions
If you are over 70 and a half years old, and
have a Traditional IRA, you probably know about these. The IRS requires that
you withdraw a certain amount each year from your account and include it in
your taxable income. At tax time this year, many of you realized that with the
new standard deduction your ability to itemize has been greatly reduced.
For those of you over 70 1/2, there is still a way to make a tax advantaged
donation to a qualified charity, like Grace United Methodist Church. By
utilizing a portion of your IRA required minimum distribution (RMD), you can
donate directly to the church and avoid the income tax. For example:
say your RMD for this year is $7,000. If you take the RMD directly, your
taxed on it as if it were ordinary income. If you’re in the 20% tax
bracket, this would cause you to pay an additional $1,400 in taxes.
every $1,000 of your RMD that you donate directly to Grace United, you reduce
your tax bill by $200!
are few rules to follow to make sure it’s done properly, but it’s not very
complicated. Since many people won’t be able to deduct their charitable
donations in 2019, this provides an excellent way to save on your taxes and to
help out our church!
If you have questions, call your accountant,
financial advisor or contact Pamela Noble at firstname.lastname@example.org or
Rich Bevilacqua at email@example.com if
you have any questions.
Donor Advised Funds
firms (including Schwab, Fidelity and Vanguard) can set up a Charitable Donor
Advised Fund for you. When you move assets like stocks, bonds or cash to this
fund you get a tax deduction immediately, but you don’t have to decide
immediately where to donate. Once you decide what charities you want to support
(and this could be in a tax year after you establish the fund) you simply give
instructions to disburse your gifts from it to the charities you support. Contact
Pamela Noble or
Rich Bevilacqua if you have any questions.
Not everyone wants to commit to making a gift in their will or
estate. Some prefer the increased flexibility that a beneficiary designation
provides by using IRAs and retirement
plans, Life insurance policies, or Commercial annuities. It
only takes three simple steps to make this type of gift. Here's how to
name Grace UMC as a beneficiary:
1. Contact your retirement
plan administrator, insurance company, bank or financial institution for a
2. Decide what percentage
(1 to 100) you would like us to receive and name us, along with the percentage
you choose, on the beneficiary form.
3. Return the completed
form to your plan administrator, insurance company, bank or financial
If you name Grace UMC in
your plans, please use our legal name, address and federal tax ID number. Grace United Methodist Church, 8 Carrera
Street, St. Augustine, FL 32084. Federal Tax Number: # 59-3532125.
Talk to your financial or
legal advisor to learn which assets will or will not trigger taxable income
when paid to a beneficiary.