Tax-Advantaged Ways of Giving

Did you know that the Internal Revenue Code provides a way to support the ministry of Berwyn UMC that may lower the amount of tax you owe? It's true. By carefully structuring your gifts, you can reduce or eliminate substantial portions of your tax liability. Below are just a few ways.

1. Gifts of appreciated assets such as stock, real estate, and collectibles: When donating an appreciated asset, the item’s current market value is deductible from your taxes. However, the gain on that asset is not taxed. For example, if you purchased stock for $1,000 that has risen to $2,000, it could be gifted to the church, and you receive a charitable deduction of $2,000. If you sold the stock and gave the church $2,000, you still receive the $2,000 deduction, but you will also have to pay a capital gains tax on the $1,000 profit. You avoid capital gains taxes if you give the asset to the church rather than selling it yourself.
2. For those receiving income from retirement accounts such as IRAs or 401K, or 403B plans, donations from those accounts given directly to the church avoid paying taxes on the withdrawn amount. The amount given even counts toward your RMD— required minimum distribution—without increasing your taxable income.
3. If your taxes are such that you are close to the threshold for itemized deductions, giving in one tax year may make sense while having the church allocate the donation to a different church year. For example, if your taxes are such that you anticipate being able to itemize this year but not next year, you can donate money in 2022 that you want to apply to the church’s budget.

If you want more information about your donation options, please visit our church website, where you can learn about the various ways to give and initiate the process of making a stock gift. You may also speak to Steve Cherry, our Financial Secretary, or Pastor Kevin. They would be happy to answer any questions you may have.