Montana Tax Credit Information

Montana Tax Credit Information

Are you considering donating cash to the Billings Catholic Schools Foundation? There may be a better way. By doing a “planned gift” and utilizing the Montana Tax Credit, you could actually give a larger gift and it would not cost you one penny more out of pocket.

Here’s how it works (figures based on 64 year-old donor assuming a 35% federal tax bracket and 6.9% MT tax bracket):

Example 1 –  $3,250 cash or by making a planned gift and utilizing the Montana Tax Credit, you could actually give a gift of $4,300 and it would not cost you one penny more out of pocket.

 

$3,250 cash donation                       Planned gift to a Qualified
to charity not                                     Endowment utilizing the
utilizing tax credit                              Montana Tax Credit

 

$3,250 cash gift                                  $4,300 gift– $3,305 tax deduction

-1,138 federal tax savings                  -1,157 federal tax savings

   -224 Montana tax savings               -1,322 Montana Tax credit

$1,888 out of pocket cost of gift         $1,821 out of pocket cost of gift
Example 2  – $25,000 cash or by making a planned gift and utilizing the Montana Tax Credit, you could actually give a gift of $33,000 and it would not cost you one penny more out of pocket.

$25,000 cash donation                      Planned gift to a Qualified
to charity not                                      Endowment utilizing the
utilizing tax credit                                Montana Tax Credit

$25,000 cash gift                                 $33,000 gift – $25,868

federal tax deduction

-8,750 federal tax savings                   -9,054 federal tax savings

   -1,750 Montana tax savings                -10,000 Montana Tax credit

(max.  allowed/ individual)

$14,500 out of pocket cost of gift          $13,946 out of pocket expense

In order for gifts to qualify for the Montana Tax Credit, they must be (1) designated to an endowment and (2) must be in the form of a planned gift, most usually a charitable remainder trust or a charitable gift annuity.

These examples are for demonstration purposes only.  Individual gifts are based on donor age, tax brackets and giving mechanism. We encourage all donors to seek professional advice from his/her tax advisor. Please call Jan Haider at 252-0252 for individualized examples.