November 2019
Welcome to the Woodlawn Family Endowment Newsletter. It is produced by your Woodlawn Endowment Committee with the help of the church staff. We hope to bring you topics important to your long term financial and spiritual health. Please let us know if you have topics you would like to learn more about.
Tax planning for 2019 and beyond:
- Standard deduction – will remain the same as 2018:
- Single or married filing separately has changed from $6,300 to $12,000.
- Married filing jointly or qualifying widow(er) has changed from $12,700 to $24,000.
If you were unable to itemize your deductions last tax year consider bundling two years of charitable gifts into this year if that will push you over the higher standard deduction and allow you to itemize for the 2019 tax year. The church has established processes to accommodate this strategy.
- If you are over 70 ½ years of age – Make your church pledge directly from your IRA. This is one of the most retirement friendly tax laws still available to you. These payments can be made from Traditional IRAs and are called qualified charitable distributions (QCDs). They have to be paid directly from the IRA account and count toward your annual required minimum distribution (RMD). They can be made in any amount up to $100,000. Unfortunately, 401k and 403b accounts do not qualify. In most cases these accounts may be rolled-over to an IRA to gain this valuable benefit.
Benefits include:
- Donations lower Adjusted Gross Income (AGI) which lowers your tax oblation.
- Income for determining the taxation of Social Security benefit is lower than if the IRA holder had taken the RMD directly.
- Deductibility limits do not apply to QCDs, which means the QCD can be made in addition to other charitable contributions that may be limited by annual maximum percentage of income or phase-outs of itemized deductions.
Other details of note:
- RMDs are not required for ROTH IRAs.
- If you are just turning 70 ½, you are not required to take your first distribution until April 1st of the following year.Subsequent years the deadline is December 31.
- If you have multiple IRA accounts, your RMD for all accounts may be taken from just one of them.
- Your RMD is calculated based on IRA balance(s) on December 31 of the previous year.Your IRA servicer is required to calculate your RMD for the following year or you may do it yourself by using the IRS worksheet.
- If you contribute all or part of your RMD to a charity, it may not show up on the 1099 for that account.Please let Rachel, the church account, know your plans so she can properly credit your account.
- Donor advised funds – Donor advised funds enable donors to practice philanthropy on a more flexible basis. The donor sets up a fund, managed by their financial institution or The Kansas Area United Methodist Foundation. Each year, the donor advises the fund manager where, when and how the funds are to be distributed. Payouts may be made from interest only or from principal. Such funds can take the place of ‘bundling’ by making contributions every other year (or as best suits your financial plans). The donation is deductible in the year it is given, but paid out to the church at any time.
As always, talk to your financial planner or tax professional for advice specific to your situation.
Questions:
For questions about the Woodlawn Permanent Endowment and Planed Giving Program, please contact anyone on your Endowment Committee. Current members are:
Pastor Lance Carrithers, Donna Pelley, Marvin Dunlap, Rita French, Wayne Stout, or Phil Schroeder – Chairperson
Remember:
What you do with what you have can change the world.
Giving to the Woodlawn United Methodist Church through your will or trust is a great way to share life-changing ministry for future generations.
Please remember the Woodlawn Family Endowment Fund when making your financial plans.
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