Dear Rock Family,
In Acts 20:35 we read, "Remember the words of the Lord Jesus, that He said, 'It is more blessed to give than to receive.'" This is undeniably the key to living the "blessed life." It also never hurts to reap the tax benefits granted to US taxpayers who make charitable contributions to the ministry.
Below are some tips, tricks and picks for 2011 to help you reap the full measure of these benefits:
Charitable gifts
A payment by check is deductible in the year the check is mailed (postmarked before the end of day on December 31, 2011) or unconditionally hand-delivered to the charity, by that same date. If a large contribution is mailed on December 31, it is also advisable to use certified mail and retain the receipt as documentation that your contribution was made before the end of the year.
Online giving
A great way to make sure your end-of-year donations make the cut-off is to utilize online giving. For business owners or investors expecting an influx of income in the first part of the year, electronic giving provides a great option to maximize your tax deductions this year for income anticipated in early January. Your 2011 contribution statement from The Rock will itemize all online donations received midnight on December 31.
Donating stocks, bonds or other monetary instruments
Stocks, bonds, annuities and certain other financial instruments can be donated directly to the church at their original cost, even if they are worth much more in the current market. Investors desiring to make donations to the church, but stand to incur tax consequences for cas hing out these investments, may benefit greatly by donating their stock directly and allowing the church to cash out the investment. Doing so provides the following benefits:
- The donor gets a tax deduction for 100% of the purchase price of the asset, and does not have to pay (the often hefty) capital gains tax on the appreciated value.
- The church gets to cash out the asset for the higher value and also does not pay taxes on it because of our non-profit status.
- These transfers are usually very east to execute and made simply by filling out a form.
Those interested donating a stock, bond or other financial instrument can initiate this by contacting Pastor Ric Guerra at [email protected]
Get a write off by donating straight from your IRA
IRA owners and beneficiaries who have reached age 70∏ are permitted to make cash donations to IRS-approved public charities directly out of their IRAs. These donations are referred to as "qualified charitable distributions" and are federal-income-tax-free to you It is important to note that donors get no itemized charitable write-off on your tax return, but it's OK because the tax-free treatment of qualified charitable distributions equates to an immediate 100% deduction without having to worry about restrictions that can delay itemized charitable write-offs.
Here are some important things to know:
- A qualified charitable disbursement (QCD) is a cash payment of an otherwise taxable distribution, by your IRA trustee, directly to a qualified public charity (like a church) and is limited to $100,000 per IRA account.
- QCDs are not included in your adjusted gross income (AGI) on your federal tax return. This lowers the odds that you'll be affected by various unfavorable tax rules pertaining to adjusted gross income.
- QCDs also count as payouts for purposes of the Required Minimum Distribution (RMD) rules. Therefore, you can donate all or part of your 2011 RMD and convert it into a tax-free distribution.
If you are over the age of 70 ∏ and think that a qualified charitable distribution might be the right approach for you, please consult with your tax preparer to confirm these benefits before making arrangements to have a distribution check made out in the name of the church.
Tax deductions for mileage when volunteering at church
People who volunteer their time at church (or with other charities) may deduct $0.14 per mile on their federal tax return for the mileage driven in their personal vehicle to and from church, The IRS still requires contemporaneous records (such as a mileage log) showing odometer readings, date of travel, charitable purpose etc. In many cases the IRS has accepted Mapquest printouts in lieu of odometer readings. This only applies to those who are serving as a volunteer on the date of travel and who are not compensated in any way by the church.
You can deduct job-search expenses
In this economy, many individuals are looking for jobs and may incur some expenses along the way and some of these are tax deductible. Here are some important things to know:
- You can only deduct expenses to search for a job that's in the same occupation as the last one you had (or the one you still have if you're looking for a better position).
- You can also deduct expenses to look for a new job in the same occupation even if you're temporarily working in another field.
- Some examples of deductible job-hunting expenses include employment agency fees, travel costs, resume preparation, copying, postage etc.
- If you drive in connection with your search, you can deduct the IRS business mileage allowance ($0.55 per mile), but the mileage is only deductible if the primary reason for your trip is the job search.
I have compiled this information from various professional sources and have confirmed that it all conforms to information published by the IRS.
I pray that this information is a blessing to you and helps you to faithfully steward the resources that God has put in your care. 2011 has indeed been a breakthrough and breakout year for The Rock and the people of The Rock...and it's not over yet!
May God richly bless you and guide you to the next level of glory!
In His service,
Ric Guerra, MBA
Associate Pastor - Church Business
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