The Tax Man Cometh: Thinking About End of Year Giving

Bill Clontz, UUA Stewardship Consultant



We’re not fond of thinking about it, of course, but right after the holiday season, comes tax season. But take heart! There is good news here. We all have the opportunity to do some good while preparing for tax season. I’m not a financial advisor (You will likely want to consult with one before making any tax or investment related decisions. And remember, with November elections and the prospect of a lame duck congressional session, late changes and opportunities could appear – watch the news!), but experience tells me many of us can do some good as we do our personal planning.

Here are some ideas you may wish to consider:

• Charitable IRA Rollover: This tax extender encourages older Americans to give out of their Individual Retirement Accounts, a giving strategy that allows IRA owners age 70-1/2 or older to exclude up to $100,000 a year from income if the IRA funds are paid directly to certain public charities. (Otherwise, the IRA owner would have to pay tax on the IRA funds before claiming the deduction).

Congress allowed this option to expire, but it could be brought back at some point. Be prepared to take advantage of this opportunity if it is reauthorized. Many retirees do not need the money that they must take out of their IRAs in the form of a Minimum Required Distribution (MRD). Being able to donate these proceeds to their congregation can be a win-win.

• Donate Appreciated Stock: With the stock market at all-time highs, making a gift of appreciated stock could provide an important financial boost for your congregation or the UUA, and provide you with a significant tax break at the same time.

Talk to your broker about your specific situation, but know that in general you could take an immediate tax deduction for the full market value of the stock and also avoid the capital-gains tax that would be owed if cashing in the securities.

• Get a Jump Start on Your Annual Pledge: No matter when your church calendar year starts or when/how your budget drive is conducted, you know that sometime after the first of the year, you will be asked to consider your pledge for the coming church year.

Why not give that some personal reflection now, at year’s end, and make an initial judgment about an increase. Start setting aside that increase now. When the new pledge year begins, you are already at about the level you wish to be, and the increase set aside for some months can be contributed as a one-time gift – all potentially earning a tax dedication as well.

Bill Clontz is the Southern Region’s UUA stewardship consultant and a member of the Congregational Stewardship Network. You can reach Bill through the CSN, through the Southern Region staff, or at bclontz@uua.org. Learn more about the CSN at http://www.uua.org/finance/fundraising/index.shtml. 
This blog has a new posting each mid month. You may add it to your RSS feed. Comments and discussion are always welcome; share your experiences with us.