Your Saint Mary’s family welcomes the opportunity to thank you for your commitment to this wonderful College. Since 1844, women who embrace challenge and expect to have an impact on the world have sought out a Saint Mary’s education. Your support makes this outstanding education possible. On behalf of the students you benefit, thank you.
We would like to share some tips for making gifts in ways that feature tax savings and other special benefits. Please contact Jo Ann G. MacKenzie ’69, Director of Planned and Special Gifts at (574) 284-4600 or jamacken@saintmarys.edu.
With proposed changes in federal tax laws, giving this year may never save you more. The higher your tax rate, the more your gifts will save you. If you are subject to the alternative minimum tax (AMT), you may be surprised to learn that charitable deductions serve to reduce the amount of both the regular income tax and the AMT.
Remember that only gifts made by December 31 can help reduce the amount of taxes you owe next April.
To receive tax benefits, the timing of your gift is critical and varies depending on what you give and how you give it.
Checks: The date you delivered or mailed your donation is generally recognized as the gift date for tax purposes.
Credit Cards: The date your account is debited is considered the date of the donation. If mailing a credit card donation in December, please mail early in the month. The College debits credit cards on the date we receive the authorization (by mail, phone, or online), but mail delivery may be slow, especially toward the end of December. To protect your 2009 tax-deduction it may be wiser to make your donation online or by telephone at (800) SMC-8871.
Please be advised that the date reflected on your receipt from Saint Mary’s reflects when the College received your gift and does not imply the date the gift was made. To determine the tax consequences of your gift, please consult IRS Publication 526 or your tax advisor.
Cash: Charitable gifts are most often made in the form of cash and checks. When you itemize your tax deductions, gifts of cash may be used to eliminate federal income tax on up to half of your adjusted gross income (AGI). You may enjoy state income tax savings as well.
Securities: Giving securities (individual stocks, bonds, or mutual fund shares) that have increased in value since you owned them can result in even greater tax savings. If owned for more than one year, you can generally give them and deduct their current value from your taxable income. You also do not have to pay capital gains tax when you give such assets, and they can be used to offset tax on up to 30% of your AGI. No tax is due on any gain. Giving securities frees up cash and can help diversify investments.
If you own investments that have decreased in value, consider selling them and making a charitable gift of the cash proceeds. This creates a loss you may be able to deduct from other taxable income while deducting the amount of the cash gift. The combined deductions for the gift and the loss may total more than the current value of the investment.
Whether you make a gift in the form of cash or other property, any unused deductions may be carried over in as many as five future years. Check with your financial services provider to ensure that your gift is completed properly and in a timely manner.
The purpose of this information is to provide general gift, estate, and financial planning information. It is not intended as legal, accounting, or other professional advice. For assistance in planning charitable gifts with tax and other financial implications, the services of appropriate advisors should be obtained. Consult an attorney for advice if your plans require revision of a will or other legal document. Tax deductions vary based on applicable federal discount rates, which can change on a monthly basis. Some opportunities may not be available in all states.
In addition to gifts of cash and securities, there are other options you might wish to consider in today’s environment.
Gifts from retirement plans. Retirement plan assets can be a practical source from which to make gifts. Unlike many other types of investment accounts, amounts withdrawn from retirement accounts are taxable to you and eventually to your heirs, if left to them.
If you are over 70½ and have an IRA, you may want to consider making charitable gifts directly from these funds. Amounts given in this way for charitable purposes are not taxed as income to you and represent a way to make completely tax-free gifts. This opportunity is only available through December 31, 2009.
If you review your estate and financial plans at year end, you may want to consider leaving a lasting legacy to Saint Mary’s College through your will, trust, or life insurance policies. You can also make a meaningful future gift to Saint Mary’s while generating income, immediate tax savings, and other benefits today. Contact Jo Ann G. MacKenzie ’69, Director of Planned and Special Gifts at (574) 284-4600 for the details.
As you can see, you can make meaningful and cost-effective charitable gifts to Saint Mary’s College by carefully planning their timing and the property used to fund them. We are pleased to provide more information to you and/or your advisors as you act to complete your plans.
© Saint Mary's College. This information reprinted with the permission of Robert F. Sharpe and Company.
