Tax deductions
Money Matters by Keith Sessions, Chief Financial Officer
As I write this, it is still January. There is snow on the ground, and temperatures are in the single digits. Hopefully, as you read it, the weather is warmer and flying season for most of us will be close.
At the end of 2017, Congress passed a tax law aimed at corporate America. As with any new bill, compromises are added along the way, additions are made, and some things are done quickly at the eleventh hour. This tax bill was no different. Because of what was reported before the final bill, there are several misconceptions as to the impact of the bill on nonprofits and specifically the AMA and local clubs.
As a quick refresher, the AMA and the AMA Foundation are both 501(C)3 organizations, making donations potentially tax deductible. Most clubs are 501(c)7 organizations, which means they are still nonprofit, but donations are not tax deductible. Both types of organizations have the potential to have to pay taxes. In fact, the AMA has taxable income every year that is offset with deductible expenses.
An outside accounting firm audits our financials every year in late April or early May to ensure that we conduct business within IRS guidelines. Under the new bill, depreciation has been accelerated, which might help us in some cases. There is a specific part of the new bill that addresses highly compensated (e.g. more than $1 million per year, including benefits and parachute payments) people of nonprofits, but this is not a concern for the AMA.
One of the biggest misconceptions is that future donations to nonprofits will not be tax deductible. This is not true, but some changes have made it harder for many people to claim a deduction. Before the new bill, the standard deduction for an individual was $6,350 and a married couple was $12,700. In 2018, the new standard deduction for an individual is $12,000 and a married couple is $24,000.
Previously, most people could deduct state and local income tax as well as property tax. Originally, the new tax bill cut out these deductions completely. The argument was that states with higher local taxes were being subsidized by states with lower taxes.
In the end (and at the eleventh hour), Congress added a provision that allows for up to $10,000 in deductions for state and local taxes. Unfortunately, this is the same amount for individuals and married couples. What all of this means is that many more people will utilize the standard deduction instead of itemizing deductions. To gain a tax-related benefit from a deduction, it must be itemized.
There are a couple of ways to give to the AMA Foundation, which might help your tax situation. The first is referred to as bundling. By combining multiple years’ worth of donations into a single year, a taxpayer might be able to rise above the standard deduction and gain at least a partial break for the gift. Another is to gift low-cost basis stock.
The market has done well for several years now. When you gift stock held longer than a year, you can use the value on the day it was gifted (average of daily high and daily low) instead of what you paid for the stock. This is still subject to the standard deduction. In addition, you are limited to 30% of your adjusted gross income (AGI).
Under the new tax bill, cash donations are limited to 60% of your AGI versus 50% in previous years. The AMA Foundation is set up to accept stock, mutual funds, and cash donations. Please contact Mandee Mikulski at mandeem@modelaircraft.org, or call the AMA for details.
This information is a summary of only a few parts of the tax bill. It is intended as education only and never should be construed as tax advice. Please see your personal financial advisor to discuss your situation.
Nominations due for AMA vice presidents
in Districts II, IV, VI, VIII, and X
Nominations for vice presidents in Districts II, IV, VI, VIII, and X are due at the Headquarters of the Academy of Model Aeronautics June 14, 2018. Any AMA Open Member may submit a nomination.
To be eligible to discharge the duties of AMA vice president, a nominee must be a Leader Member of the AMA and must reside in the district.
To be eligible to discharge the duties of AMA president or executive vice president, a nominee must be a Leader Member of the AMA and must previously have served as a member of the Executive Council or associate vice president or as a Contest Board member for at least one (1) year.
(Nominees and nominators will be notified by HQ confirming receipt of nomination. If confirmation is not received within two weeks after you have sent your document, contact Joyce Hager at [765] 287-1256, extension 200.)
A letter of acceptance and a résumé of professional qualifications and model aviation experience from the nominee must be on file at AMA Headquarters by June 29, 2018, 15 days prior to the published meeting.
Nominating Procedure Document
Relating to Article IX
Candidate Guidelines:
(a) No person may nominate himself/herself for office.
(b) No person shall simultaneously hold two positions on the Executive Council. In the event a person holding an office is elected or selected to a second position on the Executive Council, that person must choose which of the two positions he/she will continue, such decision to be made within 48 hours of the announcement of the selection, or else the person so affected will be deemed to have selected to remain in the first office held.
(c) Incumbent is automatically placed on the ballot, provided that he/she has been properly nominated and accepted, except that a ¾ vote against may withhold the incumbent’s name from the ballot (see Bylaws, Article IX, Section 2).
(d) All nominations must be received at AMA Headquarters thirty (30) days prior to the convening of the Nominating Committee Meeting. All information must be submitted by electronic means.
(e) Candidate must be a legal resident of the district in which the election is being held; this does not apply to the office of the President or Executive Vice President.
(f) Candidate must be a current AMA member with Leader Member status (other qualifications apply to the office of the President and Executive Vice President, Article IX, section 3).
(g) No person elected to and serving as an active member of the Executive Council shall be paid for any regular column or article in Model Aviation magazine. Exception may be made for such articles as the coverage of special events provided prior arrangement was made for said article. Articles and columns printed in the “AMA News” section are not paid contributions. No paid columns may be submitted after the individual has been placed on the ballot.
Candidate Acceptance:
All correspondence must be submitted electronically to AMA HQ Muncie, IN. Failure to meet all requirements, will disqualify said nominee.
(a) A letter of acceptance by the candidate must be electronically submitted 15 days prior to the meeting.
(b) Along with a résumé of professional qualifications and model aviation experience, résumé should include, but not be limited to, the below areas of consideration. Information must be received at AMA Headquarters 10 days prior to the Nominating Committee. Campaign statements will not be read by any person until it is determined who will be placed on the ballot.
- Management experience.
- Financial background.
- Insurance employment and/or expertise.
- Legal background.
- Technical background, including areas of aeronautics, electronics (especially in radio frequency propagation and usage), acoustics (as related to noise studies and analysis), and other areas of engineering.
- Aeromodeling background must be noted. The individual will be required, if elected to national office, to deal with questions related to all areas of aeromodeling and should have a broad-based background.
