Jennifer Morrison, CPA, MBA
Finance Expert and Consultant
Jennifer Morrison formerly served as Bethel's Chief Financial Officer and Director of Finance, and now serves Bethel as a consultant. Prior to her work at Bethel, Jennifer was an auditor for a regional public accounting firm, specializing in not-for-profit and government entities, and as an internal controls auditor for a Fortune 500 company.
Jennifer received her Bachelors of Science degree in Accounting, cum laude, from the University of Tennessee at Chattanooga and her Masters of Business Administration degree from East Tennessee State University. She is a CPA licensed in the state of Tennessee. Jennifer is an active member of Silverdale Baptist Church.
Good news! The IRA Charitable Rollover Provision, which first appeared as a temporary provision in 2006, is here to stay. This provision allows older adults to avoid substantial income taxes through generous giving directly from their IRA.
At the end of last year, the Protecting Americans From Tax Hike Act (PATH) was passed making the IRA Charitable Rollover Provision permanent. This means that certain individuals may transfer up to $100,000 from their IRA (or Roth IRA) account directly to a qualified charity, like Bethel, and will not have to include the funds in gross income therefore avoiding income taxes on those funds.
If you’d like to pass this valuable tax-saving wisdom along to the older adults in your family, here are the guidelines. In order to take advantage of the IRA Charitable Rollover Provision, the following requirements must be met:
- Individual must be 70 ½ or older (also the age at which required minimum distributions begin for many plans)
- Distribution made from either a traditional or Roth IRA directly to the qualified charity (may not pass through individual)
- Distribution made to a qualified charity as defined by the IRS and cannot be in exchange for any goods or services
Legally avoiding income taxes is always great and this provision allows for that and so much more.
First and foremost, you can make a huge impact for a worthy cause and at Bethel specifically you can truly change the lives of kids in crisis for years to come. A gift of this magnitude will certainly leave a lasting legacy.
For example: It costs $120 per day per child for the all-inclusive services offered at Bethel. Think of the number of kids you could support for possibly their entire stay at Bethel! Your gift could be used in many other ways as well. It could go toward the operations of a specific program or home, toward running our fully accredited on-campus school, or toward our endowment, which ensures that we are able to take care of kids for many years to come.
In addition to truly changing the world of kids in our area, and avoiding income taxes, a gift from your IRA that meets the criteria of this provision will also avoid charitable contribution limitations. Under standard IRA giving guidelines, funds would be received and taxed as gross income and would then be subject to the 50% of AGI limitation.
There are several important benefits under this provision:
- There is no percentage limitation. Regardless of your AGI, you can give up to $100,000 untaxed each year.
- You are not required to itemize deductions if it is not beneficial to you, as would be required with a standard charitable contribution.
- Higher income earners would not be subject to the itemized deduction limits, if itemizing is beneficial to them.
If you or someone in your family is interested in making a charitable rollover gift from your IRA, please contact us at 423-842-5757 x1-220 or jmorrison@BethelBibleVillage.org.
This article is not intended to be all-inclusive or applicable to your specific situation. Any accounting or tax advice given is not a substitute for a formal opinion. Please consult your tax professional for guidance on your specific situation.