Often you may have something that is no longer of use to you but may be helpful to the Student Center (example: chairs donated to us by our friends at St. Patrick Interparish School).

OR with your own skills or through the company you work for, you may wish to offer the Student Center a discounted or donated service (example: banners printed for us by our friends at Creative Workshop).

If you think you have goods or services that could help the Student Center, let us know!

IRAs - Individual Retirement Accounts
What is an IRA?
Generally speaking, an IRA is a tax-advantaged retirement account into which an investor may contribute a portion of his/her earned income. The "I" stands for individual, which is important in that these programs are arrangements individual investors make for themselves - not through an employer- sponsored flexible spending account or a payroll-deduct retirement plan.

A Traditional IRA is available to those under age 70 ½ who have earned income. Traditional IRA earnings grow tax-deferred until withdrawal. Withdrawals are required beginning at age 70 ½ and are taxed. Contributions made to this IRA may be deductible, depending on certain factors.

A Roth IRA is a nondeductible IRA introduced in 1997, through the Taxpayer Relief Act of 1997. Depending on certain income limits, taxpayers are able to save for retirement in such a way that allows the savings to grow tax- free. Taxes are paid on contributions, but qualified withdrawals are not taxed at all.

Why do donors want to give IRA assets to charitable organizations like the Student Center?
After decades of deliberate saving and favorable investment returns, some retirees have more money in their IRAs than they’ll ever need. For larger estates, a good portion of IRA wealth goes to estate taxes and income taxes of non-spousal beneficiaries; heirs may receive only 25 percent to 30 percent of IRA assets passed on to them through estates.

Instead, IRA holders may choose to leave their IRAs to qualified charitable organizations—choosing charity over taxes.

 Which donors stand to benefit most from giving their IRAs to charity?
Because charitable IRA transfers are not included in taxable income and not available for itemized charitable deductions, these special rules may benefit many different types of individuals:

·                     Financially comfortable—Individuals or couples who receive the Minimum Required Distribution from their IRA—and have other forms of income to pay living expenses—may find that transferring their Minimum Required Distributions to the Nebraska Community Foundation or an affiliated fund helps fulfill personal charitable goals, tax-free.

·                     Non-itemizers—Donors who regularly give a portion of their income to charity are not able to enjoy a tax break from the contribution because the standard deduction is still greater than the total of all itemized deductions. This may be especially true if state and local income taxes are low.

·                     High-income earners—Donors who itemize deductions may find that they cannot take full advantage of their tax deductions. Often referred to as the 3 percent floor, a taxpayer must reduce itemized deductions by 3 percent of the amount by which the taxpayer’s adjusted gross income exceeds a certain amount that is adjusted annually for inflation (currently $150,500 or $75,250 each for married people filing separately). For the years 2006 and 2007, the reduction on itemized deductions for affected taxpayers is reduced by one-third. 

·                     Generous donors—Some taxpayers may give more to charity than they can deduct that year. Donors cannot deduct more than 50 percent of their income for gifts of cash to public charities (30 percent, if giving to private foundations). Although amounts over 50 percent can be carried forward and deducted in future years, taxpayers will face an immediate tax bill and may lose some of the benefit of the deduction if they die before the gift has been fully deducted. Donors who consistently give above the limit will not be able to take advantage of the carry forward provisions. 

 In the past, how did the tax law treat charitable gifts made from IRAs?
Under past law, IRA holders faced a disincentive for giving retirement assets to charity during their lifetimes because all withdrawals from traditional IRAs were subject to income tax. Thanks to the new tax provision, retirees will be able to give far more support without being penalized, doing so during their lifetimes and seeing their gifts benefit their communities. 

In the past, when a donor of any age withdrew IRA funds to make a charitable gift, he or she was liable to pay income tax on the withdrawal, offset to varying degrees by a charitable deduction for the gift. (Charitable deductions are limited by legal restrictions, such as the percentage of adjusted gross income [AGI] limitation on charitable deductions and the 3 percent floor on all itemized deductions. If an individual does not itemize on his or her income tax return, no charitable deduction can be taken.)

 As a consequence of this unfavorable tax treatment, very few individuals donated IRA funds to charity during their lifetimes.

 How has the tax law changed?
The Pension Protection Act of 2006 permits individuals to transfer up to $100,000 from individual retirement accounts directly to a qualifying charity without recognizing the assets transferred as income for federal tax purposes. In tax years beginning after December 31, 2005, a donor who has reached age 70½ is now allowed to exclude from his or her income tax calculations certain IRA withdrawals. In most circumstances, these charitable contributions are not tax deductible unless the retirement accounts were funded with after-tax dollars.

 This provision is time-limited. It will not apply to any distribution made in taxable years beginning after December 31, 2007. 

 Now it is easier than ever for more people to enjoy the experience of making the tax-free gift of a lifetime using their excess retirement assets.

 What if a donor contributes more than $100,000 from an IRA?
Because the amount that the donor is able to exclude from income is limited to $100,000 under the act, the remaining amount would be recognized as income. Within a married couple, each person can transfer $100,000 from his or her account. A $100,000 charitable distribution may be made in 2006 and again in 2007. 

Donors may choose to contribute additional amounts to charity; however, the extent to which additional amounts can be deducted from their income will be determined following general rules of itemized deductions where the charitable percentage limitations and itemized deduction reduction are factors.

 Does a donor also receive a charitable deduction when he or she transfers assets to a charity under this provision? 
No. The benefit under this provision is that the individual does not realize the amount contributed directly from the IRA to a qualifying charity. Because a donor does not include the amount in his or her gross income, the individual may not take a charitable contribution deduction for the contribution. To do so would allow a donor to receive a double benefit from the contribution. For this reason, charitable contribution deductions are explicitly prohibited.  

How will charitable distributions affect the minimum required distributions from a taxpayer’s IRA?
Shortly after an individual reaches age 70½, he or she is generally required to receive distributions from his or her traditional IRA. Distributions from an IRA to a charity will receive the same treatment as distributions to the individual taxpayer for the purposes of minimum required distributions. 

 How can an IRA gift be made?
IRAs are typically held by a financial service or trust company. These custodians will likely provide a form that could be used to transfer the IRA directly to charity, with no tax incurred. 

 The information provided here is based on continuing analysis of the Pension Protection Act of 2006. Every effort has been made to ensure accuracy of the answers to these questions. However, due to the complexity of the bill and the fact that many of these provisions introduce issues that are new to the Internal Revenue Code, this information may be subject to change. It is not a substitute for expert legal, tax or other professional counsel and we strongly encourage donors to work with their professional advisors to determine the impact of this legislation on their particular situations. This information may not be relied upon for the purposes of avoiding any penalties that may be imposed under the Internal Revenue Code.