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Tax Advantages

Listed below are a few of the more popular ways to make charitable gifts. Each option is slightly different and provides varying advantages regarding charitable gift deductions for income tax purposes.

General Tax Considerations

Gifts to the WMU Foundation are deductible for federal income tax purposes as provided by law. You may have wondered why that statement ends with, “as provided by law.” Aren’t all such gifts tax deductible? Well, if you use a short tax form or do not itemize your deductions, your gifts are not tax deductible. It’s an obvious example, but it makes the point: generalizations about tax deductibility are just that—generalizations. The deductions, tax credits and percentage allowances described may or may not apply to you. You should consult your tax advisor or the applicable federal and state income tax instructions.

Michigan Tax Credit

If you are a Michigan resident, you can reduce your state income tax and support Western Michigan University at the same time. The state allows a portion of contributions made to Michigan universities to be credited against the state income tax. According to the law, the amount you may credit against your tax bill is equal to half of your contribution up to a maximum of $200 on a joint return, $100 on an individual return.

Also, gifts to higher education are among the few deductions still allowed on federal income tax. For many people, this means that the net cost, after state and federal taxes, of a $200 gift to Western may be $70 or less. The net cost of a $400 gift, after taxes, may be $140 or less. The amount will vary depending upon your particular tax situation, but the tax deductions and credits for gifts to Michigan universities are significant and are available to all Michigan residents.

Special Rules on Gifts to Athletics

For federal income tax purposes, a charitable contribution is generally allowed for amounts contributed in excess of the fair market value of any benefits received. However, certain limitations apply and special rules are applicable to contributions that entitle the contributor to purchase tickets to athletic events. All contributions to the Mike Gary Athletic Fund and/or to the WMU Division of Intercollegiate Athletics (for any purpose) are subject to these special rules. Please consult your tax advisor as to the proper treatment of your contributions.