I was recently made aware of a new tax law that could be beneficial to churches and other charitable organizations, especially given the possibility of higher taxes with a new Democratic administration.
The IRA Rollover provision was recently enacted and will apply to gifts made between January 1, 2008 and December 31, 2009. This provision may allow you to make charitable gifts in 2008 and 2009 to churches (or other qualifying charities) without adverse tax consequences.
Anyone who is at least 70 ½ years old and has retirement assets held in a traditional IRA may take advantage of this provision. If you fit these criteria, you can make a direct charitable gift of up to $100,000 each year (2008 and 2009) from your IRA. Because your gift is made directly to your church or other charity of choice from your IRA, the gift does not increase your adjusted gross income and will also count towards any Required Minimum Distribution (RMD) you are otherwise required to take out of your IRA during the year. Although no income tax deduction for the gift is allowed (because the gift was made directly to the church from the IRA), the overall effect is a completely tax-free gift.
If you are a pastor or church staff member, I would encourage you to inform your senior adults over 70 years old of this tax saving provision. This could save tax money for your senior adults as well as increase your church budget's bottom line.