1. How important is it that my donation be received before January 1st?
Timing is important — plan ahead! Charitable tax deductions must be claimed in the year in which they are delivered. Gifts mailed to the church are deductible in the year the check is mailed (and postmarked), even if it is received in the next year. Ward Church offices will be closed from December 25 through December 31. Donations dated 2018, and received or postmarked during that period, will be credited to your 2018 giving. If you give securities or give directly from your IRA (if you are over 70 ½) the transfer must be completed by December 31. If you have a special giving need or question, please contact Barry McKenna on his personal cell phone at (734) 355-6819.
2. Is there a tax advantage to giving appreciated stock I’ve held for more than a year?
If you donate stock that has increased in value since you bought it more than a year ago — and if you itemize deductions — you can take a charitable deduction (up to 30% of your adjusted gross income in the current year) for the stock’s fair market value on the day you give it away. You’ll also avoid capital-gains taxes on the increase in value which you would have had to pay if you sold the stock and then gave the church the cash proceeds. You can deduct the fair market value only if you hold the stock for more than a year before giving it away. If you’ve held it for less than a year, your deduction is limited to your cost basis — what you paid for the stock — not the current value. If you wish to donate securities, contact your bank or brokerage firm as soon as possible. Most banks and brokerage firms require a letter of instruction or letter of authorization to transfer shares to the church, and mutual fund companies often have a special form. Contact the Ward accounting department or Barry McKenna for information if you will need to transfer the security to Ward’s account. It’s a good idea to start the process soon enough to have it completed by early December. Some brokerages or mutual fund companies may not be able to complete a transfer by the end of the year if the process is started late in December.
3. If a stock has lost value since I purchased it, is it better to sell it and give the cash?
If the stock has lost value, it’s better to sell the stock first and give the cash to the church. You’ll still be able to deduct your charitable donation if you itemize, but you’ll also be able to take a capital loss when you sell the investment.
4. What is a Required Minimum Distribution (RMD) from my IRA, and is there an advantage to transferring it directly to a charity?
If you have a traditional IRA, you generally have to start taking mandatory withdrawals from the account when you reach age 70½. (Roth IRAs do not require withdrawals until after the death of the owner.) The required minimum distribution is the minimum amount the IRS requires you to withdraw from your account each year.
If you planned on giving from your IRA to Ward Church, you may benefit by making a Qualified Charitable Distribution (QCD). This provision of the tax code allows you to donate up to $100,000 annually from your traditional IRAs to the charities of your choice. The QCD must be transferred directly to the charity from your IRA custodian. With a QCD, you do not report the income from the IRA distribution, and you do not take a charitable deduction. This reduces the Adjusted Gross Income (AGI) on your tax return, and may also, in some circumstances, reduce the amount of Social Security income that is taxable. It also allows you to benefit from a gift to charity even if you don’t itemize. A lower AGI may also help lessen the additional Medicare premiums that come with higher incomes. Note: to be eligible for a QCD, you must have actually reached the age of 70½ before the date of the distribution. Contact your account manager for information you will need to have a transfer made to Ward’s account. It’s a good idea to start the process early. Some brokerages or mutual fund companies may not be able to complete a transfer by the end of the year if it is started late in December.
5. Can I deduct the value of volunteer work I did for Ward Church?
No, the value of personal services is never deductible as a charitable contribution. However, unreimbursed expenses you incur in performing services on behalf of Ward Church or other charities may be deductible as a non-cash donation if you itemize your deductions. You will need receipts for the expenses. You can use a “standard mileage rate” to compute a deduction for any miles you drive in performing services for your church or other charity. For 2018, the charity mileage rate is 14 cents per mile. Be sure to maintain accurate records and a mileage log.
6. I gave $135 to the church when I registered for a spring retreat. Can I deduct that amount?
No, assuming you received benefits (e.g. lodging, instruction, materials) worth $135 or more. Charitable contributions generally are deductible only to the extent they exceed the value of any premium or benefit received by the donor in return for the contribution.
7. What kind of records do I need in order to prove I made a contribution?
For individual cash contributions of under $250 you must have a bank record (such as a cancelled check) or a receipt from the church. For individual contributions (cash or property) of $250 or more, you must receive a written receipt from the church. Ward Church will provide written receipts by mid-January 2019 to all individuals and organizations that made qualified donations to Ward in 2018.
8. How can I see how much I have given to Ward Church in 2018?
Login to your “myWARD” account. Once you have logged in, choose “Giving,” and then click on the “My Statement” option. (If you have not set up a myWARD account, you can do that on the login page. This will provide you with a printable statement of your giving to date for 2018. Please note: donations sent as a part of your IRA Required Minimum Distribution (RMD) through another charitable organization will not appear on your statement
9. What if I have appreciated stock I want to give but don’t know yet which charities I want to support?
If you’d like to transfer shares this year, or when the value reaches a certain level, but want extra time to decide which charities to support, you could give the stock to a donor-advised fund. You usually need $5,000 to $10,000 to open a donor-advised fund at a brokerage firm, mutual fund company or community foundation. You can take a charitable deduction when you give the shares to the donor-advised fund, but you have unlimited time to decide which charities to support. The donor-advised fund may also accept privately held stock, real estate and other complex investments.
Note: These year end giving tips are for informational purposes only and are not intended to provide legal advice. Please consult your tax advisor or accountant.MAKE A YEAR-END GIFT