Planned Giving

Father Bob and the Stewardship Commission of the Church of the Holy Family have assembled highlight pieces on several options you have with respect to your charitable giving that you could use to take advantage of changes in recent changes to our new tax law or to leave a legacy to Church of the Holy Family.

IRA Minimum Distributions

With recent changes in the income tax rules you may not obtain a tax benefit from your charitable contributions because of increases in both your personal exemption and Standard deduction that may prevent you from benefiting from itemizing your tax deductions.  If your itemized deductions don’t exceed the current standard deduction ($14,700 if single and over age 65, $29,400 if married and both spouses over age 65) then you will receive no tax benefit from your charitable donations.  However, if you’re taking required minimum distributions (RMDs) from your traditional IRA, there’s a smart strategy that will still allow you to obtain a financial benefit from your charitable donations, even if you’re still claiming the standard deduction.

Using a Qualified Charitable Distribution (QCD), you can transfer up to $100,000 per year from your IRA directly to a qualified charity.  It is only available to IRAs and individuals who have reached RMD age (70.5).  Any amount processed as a QCD counts toward your RMD requirement and reduces the taxable amount of your IRA distribution.  This lowers both your adjusted gross income and taxable income for both federal and state taxation and results in a lower overall tax liability.

Example:  70-year old couple, who have an annual RMD between the two of them of $24,000, decides to direct $10,000 of it to charity as a QCD, it will reduce their taxable income by $10,000 and they still get to claim the same $26,500 standard deduction.  If this couple was in the new 24% tax bracket they would save $2,400 in federal income taxes alone by using this strategy.

If you are set to automatically receive monthly distributions from your IRA you will need to make changes in order to take advantage of the QCD and inform your IRA custodian what you wish to do.  You will need to inform your tax preparer that you have done this because it won’t be identified on the annual 1099-R tax form you will receive that reports your IRA distributions.

Bequests, Trusts, Life Insurance

You can make a gift to the Church of the Holy Family through a bequest in your Will, as a named charity in a Trust, or through an amount specified in a life insurance policy.  These can all be effective ways to leave a legacy for the Church of the Holy Family as part of the remainder of your estate.  Each piece we have provided explains each of these options in more detail.

Donor Advised Fund

A Donor Advised Fund (DAF) is typically a charitable giving or philanthropic vehicle administered by a public charity.  It allows donors to make charitable contributions, gain an immediate tax advantage, and give recommendations for grants from the fund over a certain period of time.   A DAF is like a charitable-savings account where donors contribute to the fund as often as they want and then give grant recommendations to their favorite charity immediately when they are ready. 

The content of this document and the other corresponding materials provided are informational only and are not intended to be tax or investment advice.  If it is your desire to implement of any of these strategies, you should seek the assistance of your legal, tax and/or financial advisor.
 

For more information about planned giving at the Church of the Holy Family
contact Fr. Bob at [email protected] or 248 349-8847 x228