Support Articles

  • Save Taxes and Support Heritage

    Save Taxes and Support Heritage

    by Rebecca A. Pace, CPA/PFS, HUUC Accounts Receivable Treasurer

    I want to be sure you are aware of a tax savings strategy that many members of Heritage are using to support our church: Qualified Charitable Distributions or QCDs.

    If you are over 70 ½ you can have a distribution from your IRA sent directly to the church, and not pay any tax on the withdrawal. If you are already taking withdrawals from your IRA and making charitable contributions out of your pocket, this method will reduce your Adjusted Gross Income, and your income tax. It may reduce the taxable portion of your Social Security. It also reduces the income that is taxable to the State of Ohio. A simple charitable deduction cannot do all of these things.

    If you are over 72, these distributions count towards your Required Minimum Distribution (RMD).

    You will get a tax statement from the church, acknowledging your gift. In most cases the statement will indicate if the donation came from your IRA, but it is your responsibility to verify the exclusion limitations and determine if the contribution qualifies as a QCD.

    Remember, IRA means “Individual.” The distribution comes from an Individual’s account, not a joint account, so the income exclusion is for the Individual.

    QCDs can be made from inherited IRAs. A QCD can come from a Roth IRA, but it would not give you any tax benefit.

    There are a few rules to follow. The distribution must be made directly by the trustee of your IRA to the church or other qualifying charitable organization. Not all charities qualify. The maximum that can qualify for a QCD can be more than your RMD, but cannot exceed $100,000 per person. If you contribute to your IRA in the same year you make the distribution, the full amount of the distribution may not be excluded from income. Also, if your IRA includes non-deductible contributions, only a portion of the distribution qualifies for income exclusion.

    A QCD is reported, by the custodian, on the annual 1099-R tax statement, like any other IRA withdrawal. The full distribution is reported on your tax return, along with the offsetting exclusion. You can still report the income and take a deduction for a charitable contribution, but using the QCD strategy will probably give you a more generous tax benefit.

    Be sure to consult your tax advisor for advice about your specific situation.

    Your support of Heritage can be a win all around, for the church and for your pocketbook.

    March, 2022.


  • Leveraging the Benefit of Your Gifts, Part Three

    Leveraging the Benefit of Your Gifts, Part Three

    by Rebecca Pace, HUUC Accounts Receivable Treasurer

    If you have stock that has been held for more than one year, you can donate the appreciated stock to the church, deduct the fair market value of the stock as a charitable deduction, and pay no tax on the unrealized gain.

    Selling the stock yourself and taking a deduction for the cash gift may actually result in higher taxes. First, because of the increased standard deduction, an itemized deduction has lost some value. Also, the taxable gain on the stock will increase your Adjusted Gross Income which will increase your Ohio taxable income. If you are receiving Social Security, the additional income may increase the tax burden on your benefits.

    If you are considering doing this, talk to us first. The church has a brokerage account that will allow a quick and painless transfer. If you talk with your financial advisor first, they will probably want to open a new account that will double the paperwork and delay the transfer.

    If the stock has a loss, you may want to sell it first, donate the proceeds to the church, for an itemized deduction, and deduct the loss on your tax return.

    November, 2019.


  • Leveraging the Benefit of Your Gifts, Part Two

    Leveraging the Benefit of Your Gifts, Part Two

    by Rebecca Pace, HUUC Accounts Receivable Treasurer

    Since the change in the tax law, increasing the standard deduction, Donor Advised Funds (DAF) have become more popular. Think of them as charitable savings accounts.

    Tax-deductible contributions to a DAF allow a taxpayer to bunch their charitable contributions into one year, in order to itemize deductions, while taking the standard deduction in other years. You get the tax deduction when you make the contribution to the fund, but the actual grant to the church or other charity can be made later. This is particularly effective if you have unusually high income one year, with extra cash, but you want to be able to make contributions in later years when your cash flow is back to normal levels.

    Donor Advised Funds have been around since 1931. The Greater Cincinnati Foundation sponsors DAFs as well as many brokerage houses. If you are considering this strategy, shop around to find one that fits your needs. Costs and support vary.

    Your donation to the DAF is irrevocable. Technically, the donor advises the DAF custodian on when and what organizations should receive grants. There are a few restrictions on what type of organizations can receive grants from a DAF. You can make grants to the church or Heritage Acres or to the Endowment Fund.

    Donor advised funds can accept cash, or stock or other property that can be sold. Most DAFs have a limited menu of investment choices you may use until you make the actual grant to the church or other charity.

    October, 2019.


  • Leveraging the Benefit of Your Gifts, Part One

    Leveraging the Benefit of Your Gifts, Part One

    by Rebecca Pace, HUUC Accounts Receivable Treasurer

    You may have noticed a change when you filed your 2018 tax return. The standard deduction increased so that many people no longer itemize their deductions. But, you can still get tax savings from your charitable donations without itemizing.

    This month I want to highlight a popular method—Qualified Charitable Distributions (QCD). You must be over 70 ½ to use this strategy.

    A person over 70 ½ can direct their retirement IRA Required Minimum Distribution (RMD), or a portion of it, to the church and avoid tax on the distribution. The charitable distribution counts toward your required minimum distribution.

    Reducing the taxable income this way will reduce your adjusted gross income, which may reduce the tax burden on your social security benefit, possibly lower your Medicare premiums, and reduce your Ohio state income tax. A lower adjusted gross income may also provide other benefits, depending on your individual situation.

    Even if you take more from your retirement account than your RMD, you can still reduce the taxable amount by directing some of it to the church.

    In order to take advantage of this strategy you must follow these rules.

    1. The check or transfer to the church must come directly from the retirement account. You cannot deposit the retirement money into your personal account and then write a check to the church.
    2. An individual can make a QCD for more than their RMD, but they cannot exclude income of more than $100,000 per person. If you want to withdraw more than your RMD, use the first distribution in the year for the QCD.
    3. Be sure your tax preparer knows you have made the QCD. You will receive a 1099 showing all of your retirement distributions from the account custodian. The QCD may not be identified on the 1099. It is also very helpful to let the church know that you are using this strategy, so it can be noted on your giving statement.
    4. Full disclosure, I’m encouraging donations to the church, but QCDs can be made to most charities.  Gifts to can be made to Heritage Acres and to the Heritage Endowment Fund.
    5. You can’t take a tax deduction for the amount given to the church if you don’t pay tax on the distribution, but when you’re using the standard deduction, that’s irrelevant.

    There is no tax advantage to taking a QCD from a Roth IRA.

    September 2019.


  • Support Heritage Church While You Shop

    Support Heritage Church While You Shop

    You can use your Kroger Plus card to support Heritage Universalist Unitarian Church. Here’s what to do.

    Kroger Community Rewards

    Kroger is committed to helping our communities grow and prosper. Every year, Heritage Church earns hundreds of dollars through Kroger Community Rewards.

    All you have to do is shop at Kroger and swipe your Plus Card! Go to kroger.com/communityrewards to get started!