By Lisa Arbelaez, Stewardship Chairperson
Throughout the year, Glen Mar receives gifts from congregation members to support church ministries and missions that also allow them to take advantage of tax laws beneficial for charitable gifts. Here is some useful information on several options.
Income tax laws encourage contributions to public charities like Glen Mar by providing, within the tax code, income tax deductions for donors who itemize deductions on their federal tax returns. Donors can make gifts at reduced costs. For example, if you make a cash contribution of $1,000 to Glen Mar, you may claim a deduction of $1,000 on your income tax return. If you are in the 37.0% marginal income tax bracket, you will reduce your overall federal tax liability by $370. In effect, you can give Glen Mar $1,000 at a cost to you of $630. If you fall into a lower tax bracket, the reduction to your tax liability will be less, but still advantageous. For example, if you make a $50 contribution, you can deduct that $50. In the 24% tax bracket, this would reduce your tax liability by $12. In effect, your $50 contribution only costs you $38. Every little bit helps – you and Glen Mar.
Similarly, if your gift is in appreciated stock, you are able to deduct the full value of the appreciated stock. This can be more advantageous to you than selling the stock directly and personally paying the capital gains tax. Long-term appreciated stock gifts are deductible at their full fair market value for both federal and Maryland income tax purposes. There is no capital gains tax due on the appreciated portion of the stock when you gift the stock to Glen Mar. With the historically high returns of the equity markets this year, giving appreciated securities to Glen Mar is especially valuable, allowing you to avoid a higher-than-average capital gains tax on the gift while obtaining the tax deduction.
Donors might also consider contributing some portion of their IRA Required Minimum Distributions (RMD) to Glen Mar via a qualified charitable distribution (QCD). This move allows IRA owners aged 70 ½ or older to directly transfer any amount, up to $100,000, to Glen Mar each year. The QCD amount won’t be included in your adjusted gross income for tax purposes. Whether from a 401(k), 403(b), or an IRA, the distribution is tax-free and must be paid directly to Glen Mar from the account and cannot be first distributed to you. You should consult with your tax advisor or accountant for further direction on a QCD.
Some people make such gifts at regular intervals during the year. Others choose to do so toward the end of the year as they prepare for tax season. Another tax strategy some donors use to maximize their tax benefits is to group two or more years of donations into a single year. These options are appropriate for any size gift, not just large amounts. These are giving opportunities to keep in mind as you evaluate your potential tax liability for 2024.
How to give to Glen Mar online:
https://onrealm.org/GlenMarChurch/-/form/give/now
