GIVING IS GOOD AND REWARDING

By Robert J. Allen, Consultant

Believe it or not, there are many Americans today with sizeable 401K or IRA accounts who do not need the income their accounts generate! Furthermore, the Internal Revenue Service forces people to begin to withdraw funds from their retirement account when they reach a certain age. This creates an immediate tax consequence for the account holder. Fortunately, for people in this position, over 70 1/2 years old, thanks to changes in the Federal tax code for 2006 and 2007, there is an easier way to make a gift to Benedictine education. The Pension Protection Act of 2006 allows you to make a direct gift to the charity of your choice from your IRA with absolutely no tax consequences. In the past, when withdrawing funds from your IRA, the money had to first be declared as income, then the gift to the charity declared as a deduction. In most cases, this resulted in a negative tax consequence to you, the donor. Under the new law, you can contribute up to $100,000 from your IRA directly to the charity of your choice. For the tax years 2006 and 2007, an IRA rollover gift creates neither new income to report nor taxes to pay. The gift is essentially a wash  from a tax perspective, making it even easier than writing a check. While the new law is only in effect through the 2007 tax year, we are hopeful that it will be extended. Since we do not know if that will occur, however, it may be important to act soon to take advantege of this change. Please consult your tax attorney or accountant to discuss the specific details of this change and how it applies to you.

No matter how you choose to make a gift, there is no nation or group of people more generous than Americans. The charity of the American people is only outdone by God and he doesn't need a charitable deduction. So why are we so good to so many over a million different charities? Surely not because of the deduction or because we are pressured to do so. I believe it is because we who give realize that our good fortune comes from God's blessings. If we cannot be personally involved in a charity's good works, we can support their causes through our blessings

Your gift, no matter how you choose to donate, does make a difference both for the charity and for you, the donor. All gifts are important and are received in the spirit of God's command to love Him and love one another. God will not forget or be outdone in your generosity.