Since World Mission Prayer League doesn’t solicit contributions, I usually don’t get into tax implications of giving. However, due to changes in the tax code affecting charitable contributions, someone suggested I bring a matter to your attention. If you have tax deferred retirement accounts, such as a 401(k) or 403(b) and you are over age 70 ½ this may apply to you. The increase in the Standard Deduction to $12,000 for individuals and $24,400 for married couples filing jointly makes it more difficult to itemize deductions, which you must do to claim a tax deduction for charitable contributions.
However, if you are over 70 ½ or will become 70 ½ during the year, you may still be able to get a tax benefit for a charitable contribution. Once you pass 70 ½ you will be required to take a minimum distribution from your tax deferred accounts. This is creatively called an RMD (Required Minimum Distribution). If the check or transfer comes to you, the income must be added to your taxable income and you pay tax on it. However, if you tell your financial institution to send the money to a charity or your church, it becomes a QCD. The government loves initials. QCD stands for Qualified Charitable Distribution. A QCD is not added to your taxable income so you don’t pay tax on it. If you use it as part of your tithe, or as an additional contribution, you still get a tax benefit for doing so. If you have any questions concerning RMD’s or QCD’s contact your financial or tax advisor.
As much as we hate to pay them, we appreciate some of the good things taxes are used for. We recognize they are necessary for running a government. However, as I was told by my tax class professor many years ago, the tax code is written with the assumption that tax payers will take advantage of every break they can. So give happily and tax free.
Thank you all for your prayers and support.