A sister Christian organization, Dallas Seminary Foundation, sent out a short recap of the new tax law that was enacted at the end of last year. We think it is a good presentation and want to share it with you. On December 17, the President signed a tax act which has become law. Below is a summarization of the main areas that would be of interest to many of our friends and families.
- The Charitable IRA Rollover
- Allows taxpayers who are 70 1/2 or older to make tax-free transfers of up to $100,000 per year from a Traditional IRA or Roth IRA directly to charity, and has been extended for two years. It is retroactive to January 1, 2010 and recognizing there is little time left in 2010, the new law allows donors to elect to treat IRA rollover gifts made in January 2011 as if they were made on December 31, 2010. Doing so allows one to count their gift against the $100,000 limitation for 2010 instead of 2011 and counts towards fulfilling their required minimum distribution for 2010.
- Extension of Ordinary Individual Income Tax Rates Through 2012
- 10%, 25%, 28%, 33% and 35%
- Extension of Capital Gains and Dividend Rates Through 2012
- 0% for taxpayers below the 25% ordinary income tax brackets
- 15% for taxpayers in the 25% or above ordinary income tax brackets
- Repeal of the Itemized Deduction Limitation Until 2012
- This repeal will allow taxpayers who itemize and are in the higher income levels to use more of their deductions, which includes their charitable deductions.
- Adjustments to Estate, Gift and Generation Skipping Tax for 2011 and 2012
- The new law also unifies the estate, gift tax and generation skipping tax system again through 2012!
- The new law sets the exemption at $5 million per person ($10 million for a couple) and a top tax rate of 35%. The new rates and exemption are effective January 1, 2010, but executors may elect to choose no estate tax and modified carryover basis for estates anytime during 2010.
Please call David Stone, Director of Donor Relations at Jews for Jesus, should you have any questions about how this might affect you.
David J. Stone
442 High Point
Murphy, TX 75094