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A Lifetime of Memories (continued from page 1) That desire to help extends back to her alma mater. Because she wants to help other students grow and learn through a Bradley experience, Tomlinson has included the University in her will. “I look at it as an opportunity to further someone’s education and help him or her fulfill a dream at a quality university.” “It’s so hard for kids, even with grants and scholarships, to pay for school. We [she and her late husband Dave] didn’t have kids, so I want to give someone else’s child the opportunity to earn a quality education.” Tomlinson continues to be connected with Bradley as a diehard basketball fan and attends both men’s and women’s basketball games with her mother, JoAnn Cooper. She started attending Bradley games with her parents as a child and vividly remembers seeing Bradley legends Roger Phegley ’78 and Bobby Humbles ’78 play when she was a BU student. She also loves to see the changes on campus and is impressed with the new Renaissance Coliseum, as well as the Markin Family Student Recreation Center and other new construction projects. In addition, she appreciates the flowers that beautify campus. The physical campus has grown and improved over the years, while the close mentoring between faculty and students remains strong. “I received a great education at Bradley, and it continues to be a wonderful university,” Tomlinson says. You can’t forget the place that has given you a lifetime of memories.

Pathways A charitable planning guide for Bradley alumni and friends

Jerry D. Heller, CFRE Executive Director of Gift Planning jdheller@bradley.edu

SPRING 2011

PHONE: (309) 677-3661 TOLL-FREE: (800) 327-7886

In this issue...

THE CAMPAIGN FOR A BRADLEY RENAISSANCE 1501 W. BRADLEY AVE. PEORIA, IL 61625

• New Tax Law provides sweeping tax changes

The information in this publication is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are based on rates current at the time of printing and are subject to change. References to estate and income tax include federal taxes only; individual state taxes may further impact results.

• Good news for IRA owners and charitable giving

Good News for Taxpayers Despite the fact that new rules create some long-term uncertainty, the current tax changes are good news for taxpayers. We are extremely grateful for benefactors who support the mission set forth by our founder, Lydia Moss Bradley. It was indeed through her thoughtful and careful planning that Bradley University was established. We look forward to helping you accomplish your goals and strengthen the Bradley experience. Please let us know if we can provide information or assistance as you consider ways to help us make a difference. Just call, send an email, or return the attached card. Be sure to request our complimentary brochure, What You Should Know about Recent Changes in the Tax Law. As always, thank you for your interest and consideration.

A Lifetime of Memories How can you forget walking across campus to cheer for the Braves in Robertson Memorial Field House…conducting research on chemotherapy drugs with Dr. Alan Galsky…eating at the original Avanti’s on Main Street…making late-night runs to Dunkin’ Donuts…meeting someone who would become a lifelong friend at freshman orientation? These are just a few of the memories Roberta Cooper Tomlinson ’80 recalls about her Bradley days that began 35 years ago. When it was time to choose a college, Bradley was an easy choice for Tomlinson. “My dad (Robert Cooper ’50) is an alum, Bradley was close to home, and I knew it was a good university,” says Tomlinson, who grew up about 60 miles southwest of Peoria in Astoria. “Being from a smaller high school, I did not like the idea of going to a large state school. At a smaller school, students have more opportunities to be involved.” Tomlinson remembers freshman orientation, when she met Kathy Anderson Hussong ’80, who remains her best friend. They roomed together their junior and senior years in Williams Hall. “College brings lots of opportunities, personally and professionally,” says Tomlinson, who remembers singing in the Bradley Community Chorus and completing an internship at Methodist Medical Center. A biology major, she has worked at Graham Hospital in Canton since June 1981 and now is a blood bank supervisor. “My job still challenges me. I can always learn and also feel like I’m helping someone.” continued on back page

During these times of change and adjustments, the role of charitable giving remains as important as ever. A wide variety of options are available to meet personal needs and philanthropic goals. As one of the supporters who makes our mission possible, we’re convinced that you will find exceptional giving strategies at Bradley University, with unique combinations of tax savings and personal satisfaction. Please contact us if we can help you and your advisors explore the many opportunities to support our work in a personally rewarding way.

The Role of Philanthropy PEORIA, IL 61625 1501 W. BRADLEY AVE. THE CAMPAIGN FOR BRADLEY RENAISSANCE

A


Taxpayer-Friendly Law Has Sweeping Impact

U.S. Secretary of Transportation, Ray LaHood, ‘71 speaks to a class of Bradley Students.

With an unexpectedly large bipartisan majority, the 2010 Congress passed the most far-reaching tax bill in a decade. The bill averted across-the-board tax increases and enacted new breaks for individuals, including extension of the Bush-era income tax cuts, a significant increase in the estate tax exemption, and a lower estate tax rate.

What Changed? Good News for IRA Owners and Charitable Giving Since its introduction in 2006, the IRA Charitable Rollover has been a popular method for donors to give to charity. As part of the new law, a donor age 70 1⁄2 or more can direct a qualified charitable distribution from an IRA to charity. There are many reasons why IRA Charitable Rollovers are a wonderful way to realize charitable goals. To start, the amount distributed from an IRA is excluded from the donor’s income for federal tax purposes. And, equally important, the amount distributed from an IRA counts towards the donor’s required minimum distribution for that year. Special rules apply to making distributions from an IRA directly to charity. Here are some important points to keep in mind: • A donor must be 70 1⁄2 or older on the date of the distribution to participate. • A donor directs a distribution from an IRA to a qualified charity such as Bradley University. • The amount distributed from an IRA is excluded from the donor’s income for federal tax purposes. • The donor may designate up to $100,000 per year using a qualified IRA charitable distribution. • The IRA Charitable Rollover provision is in effect for 2011 only.

We finally have a law that answers the question… what will happen to the estate tax? • The estate tax exemption—the amount in a taxable estate that is protected from tax—is set at $5 million ($10 million for married couples) in 2011 and 2012. • The top estate tax rate for taxable estates is set at 35%—down significantly from 45% in 2009. • Both lifetime gifts and estates have the same exemption amount and the same top tax rate— linking gift and estate taxes into what is often referred to as the “unified” credit. • A novel spousal feature has been added to the estate tax law that provides full portability of unused exemption amounts between spouses. This means exemption amounts unused by one spouse can be used by the surviving spouse’s estate. • The generation skipping transfer tax is set with a $5 million exemption and a top rate of 35%. This additional tax (apart from the estate or gift tax) is imposed on transfers made to grandchildren or great-grandchildren.

Cut in Payroll Tax Another taxpayer-friendly provision of the new tax law is the payroll tax cut. As you know, employers are required to withhold a certain percentage of wages from every paycheck for Social Security. Employers and employees are each required to contribute 6.2% of wages—12.4% total. However, in 2011, the employee’s contribution is reduced by 2%

so only 4.2% of the employee’s wages are subject to the payroll tax.

What Stayed the Same? Many important provisions are not affected by the new law. • Lower income tax rates put into place during the Bush era remain intact for 2011 and 2012. Income tax rates still range from 10% to 35%. • Lower long-term capital gain tax rates, also put in place during the Bush era, remain the same for 2011 and 2012. The tax rate on longterm capital gain is 0% for individuals with a top marginal tax rate of 10% or 15%. For people in the higher marginal brackets—25% or more—the rate is 15%. These rates also apply to qualified dividends. • The “marriage penalty” relief provision stays in effect for 2011 and 2012. This provision doubles the standard deduction and widens the tax bracket for joint filers.

tant to remember the federal tax law that’s in effect now will probably change in the not-toodistant future. Indeed, the new law contains a sunset provision which means, at the end of 2011 or 2012 (depending on the particular section), the law reverts back to what it was before the law was enacted. For example, the income tax rates are scheduled to jump and the number of tax brackets would be reduced to five (see chart) in 2013. Year

Income Tax Rates

2011 and 2012

10% - 15% - 25% - 28% - 33% - 35%

2013

15% - 28% - 31% - 36% - 39.6%

Know How the New Tax Law May Impact You Charitable giving strategies still have a role in planning We hope you have found useful ideas in this issue of Pathways. To further aid your planning, send for a complimentary copy of the brochure listed below, with no obligation. Simply fill out this tear-off card, fold, tape it on the open end, and drop it in the mail to us. We’ll pick up the postage. Please send a complimentary copy of What You Should Know about Recent Changes in the Tax Law—a brochure that provides a summary of the tax law changes and how they affect personal planning.

Congress could also pass a new law before 2013. Though it is difficult to know what will happen, it is important to keep your plans upto-date. When you work with your advisors, remember one constant remains: The positive and reliable role charitable giving can play in meeting overall planning and wealth management goals.

I am interested in more information about gifts that provide income. I’m interested in discussing the various ways to support Bradley University. Please contact me

• Another popular provision the new law extended is a taxpayer’s right to deduct either state sales tax or state income tax. This can be attractive to taxpayers who have made large purchases. It’s especially good news for anyone residing in states with no income tax.

___ by phone ___ by email to talk about these possibilities. I/We have already included Bradley University in our estate plans.

• At one time there was a limit on how much high-income taxpayers could deduct in itemized tax deductions. When adjusted gross income reached a certain level, the taxpayer had to reduce deduction amounts. This limit was gradually phased out over several years. In 2010, there was no limit on itemized deductions for high-income taxpayers, and the new law extends this repeal for 2011 and 2012.

NAME

ADDRESS

• The repeal on the phase-out of personal exemptions for high-income taxpayers has also been extended for 2011 and 2012.

CITY

What Will Change in the Not-Too-Distant Future?

STATE, ZIP

Tax laws are periodically reviewed, and for now we can only focus on the new law—what has changed and what remains the same. However, it’s impor-

TELEPHONE

EMAIL

2

Bradley University PATHWAYS

Visit us online at campaign.bradley.edu

3


Taxpayer-Friendly Law Has Sweeping Impact

U.S. Secretary of Transportation, Ray LaHood, ‘71 speaks to a class of Bradley Students.

With an unexpectedly large bipartisan majority, the 2010 Congress passed the most far-reaching tax bill in a decade. The bill averted across-the-board tax increases and enacted new breaks for individuals, including extension of the Bush-era income tax cuts, a significant increase in the estate tax exemption, and a lower estate tax rate.

What Changed? Good News for IRA Owners and Charitable Giving Since its introduction in 2006, the IRA Charitable Rollover has been a popular method for donors to give to charity. As part of the new law, a donor age 70 1⁄2 or more can direct a qualified charitable distribution from an IRA to charity. There are many reasons why IRA Charitable Rollovers are a wonderful way to realize charitable goals. To start, the amount distributed from an IRA is excluded from the donor’s income for federal tax purposes. And, equally important, the amount distributed from an IRA counts towards the donor’s required minimum distribution for that year. Special rules apply to making distributions from an IRA directly to charity. Here are some important points to keep in mind: • A donor must be 70 1⁄2 or older on the date of the distribution to participate. • A donor directs a distribution from an IRA to a qualified charity such as Bradley University. • The amount distributed from an IRA is excluded from the donor’s income for federal tax purposes. • The donor may designate up to $100,000 per year using a qualified IRA charitable distribution. • The IRA Charitable Rollover provision is in effect for 2011 only.

We finally have a law that answers the question… what will happen to the estate tax? • The estate tax exemption—the amount in a taxable estate that is protected from tax—is set at $5 million ($10 million for married couples) in 2011 and 2012. • The top estate tax rate for taxable estates is set at 35%—down significantly from 45% in 2009. • Both lifetime gifts and estates have the same exemption amount and the same top tax rate— linking gift and estate taxes into what is often referred to as the “unified” credit. • A novel spousal feature has been added to the estate tax law that provides full portability of unused exemption amounts between spouses. This means exemption amounts unused by one spouse can be used by the surviving spouse’s estate. • The generation skipping transfer tax is set with a $5 million exemption and a top rate of 35%. This additional tax (apart from the estate or gift tax) is imposed on transfers made to grandchildren or great-grandchildren.

Cut in Payroll Tax Another taxpayer-friendly provision of the new tax law is the payroll tax cut. As you know, employers are required to withhold a certain percentage of wages from every paycheck for Social Security. Employers and employees are each required to contribute 6.2% of wages—12.4% total. However, in 2011, the employee’s contribution is reduced by 2%

so only 4.2% of the employee’s wages are subject to the payroll tax.

What Stayed the Same? Many important provisions are not affected by the new law. • Lower income tax rates put into place during the Bush era remain intact for 2011 and 2012. Income tax rates still range from 10% to 35%. • Lower long-term capital gain tax rates, also put in place during the Bush era, remain the same for 2011 and 2012. The tax rate on longterm capital gain is 0% for individuals with a top marginal tax rate of 10% or 15%. For people in the higher marginal brackets—25% or more—the rate is 15%. These rates also apply to qualified dividends. • The “marriage penalty” relief provision stays in effect for 2011 and 2012. This provision doubles the standard deduction and widens the tax bracket for joint filers.

tant to remember the federal tax law that’s in effect now will probably change in the not-toodistant future. Indeed, the new law contains a sunset provision which means, at the end of 2011 or 2012 (depending on the particular section), the law reverts back to what it was before the law was enacted. For example, the income tax rates are scheduled to jump and the number of tax brackets would be reduced to five (see chart) in 2013. Year

Income Tax Rates

2011 and 2012

10% - 15% - 25% - 28% - 33% - 35%

2013

15% - 28% - 31% - 36% - 39.6%

Know How the New Tax Law May Impact You Charitable giving strategies still have a role in planning We hope you have found useful ideas in this issue of Pathways. To further aid your planning, send for a complimentary copy of the brochure listed below, with no obligation. Simply fill out this tear-off card, fold, tape it on the open end, and drop it in the mail to us. We’ll pick up the postage. Please send a complimentary copy of What You Should Know about Recent Changes in the Tax Law—a brochure that provides a summary of the tax law changes and how they affect personal planning.

Congress could also pass a new law before 2013. Though it is difficult to know what will happen, it is important to keep your plans upto-date. When you work with your advisors, remember one constant remains: The positive and reliable role charitable giving can play in meeting overall planning and wealth management goals.

I am interested in more information about gifts that provide income. I’m interested in discussing the various ways to support Bradley University. Please contact me

• Another popular provision the new law extended is a taxpayer’s right to deduct either state sales tax or state income tax. This can be attractive to taxpayers who have made large purchases. It’s especially good news for anyone residing in states with no income tax.

___ by phone ___ by email to talk about these possibilities. I/We have already included Bradley University in our estate plans.

• At one time there was a limit on how much high-income taxpayers could deduct in itemized tax deductions. When adjusted gross income reached a certain level, the taxpayer had to reduce deduction amounts. This limit was gradually phased out over several years. In 2010, there was no limit on itemized deductions for high-income taxpayers, and the new law extends this repeal for 2011 and 2012.

NAME

ADDRESS

• The repeal on the phase-out of personal exemptions for high-income taxpayers has also been extended for 2011 and 2012.

CITY

What Will Change in the Not-Too-Distant Future?

STATE, ZIP

Tax laws are periodically reviewed, and for now we can only focus on the new law—what has changed and what remains the same. However, it’s impor-

TELEPHONE

EMAIL

2

Bradley University PATHWAYS

Visit us online at campaign.bradley.edu

3


For more information, please contact

A Lifetime of Memories (continued from page 1) That desire to help extends back to her alma mater. Because she wants to help other students grow and learn through a Bradley experience, Tomlinson has included the University in her will. “I look at it as an opportunity to further someone’s education and help him or her fulfill a dream at a quality university.” “It’s so hard for kids, even with grants and scholarships, to pay for school. We [she and her late husband Dave] didn’t have kids, so I want to give someone else’s child the opportunity to earn a quality education.” Tomlinson continues to be connected with Bradley as a diehard basketball fan and attends both men’s and women’s basketball games with her mother, JoAnn Cooper. She started attending Bradley games with her parents as a child and vividly remembers seeing Bradley legends Roger Phegley ’78 and Bobby Humbles ’78 play when she was a BU student. She also loves to see the changes on campus and is impressed with the new Renaissance Coliseum, as well as the Markin Family Student Recreation Center and other new construction projects. In addition, she appreciates the flowers that beautify campus. The physical campus has grown and improved over the years, while the close mentoring between faculty and students remains strong. “I received a great education at Bradley, and it continues to be a wonderful university,” Tomlinson says. You can’t forget the place that has given you a lifetime of memories.

Pathways A charitable planning guide for Bradley alumni and friends

Jerry D. Heller, CFRE Executive Director of Gift Planning jdheller@bradley.edu

SPRING 2011

PHONE: (309) 677-3661 TOLL-FREE: (800) 327-7886

In this issue...

THE CAMPAIGN FOR A BRADLEY RENAISSANCE 1501 W. BRADLEY AVE. PEORIA, IL 61625

• New Tax Law provides sweeping tax changes

The information in this publication is not intended as legal advice. For legal advice, please consult an attorney. Figures cited in examples are based on rates current at the time of printing and are subject to change. References to estate and income tax include federal taxes only; individual state taxes may further impact results.

• Good news for IRA owners and charitable giving

Good News for Taxpayers Despite the fact that new rules create some long-term uncertainty, the current tax changes are good news for taxpayers. We are extremely grateful for benefactors who support the mission set forth by our founder, Lydia Moss Bradley. It was indeed through her thoughtful and careful planning that Bradley University was established. We look forward to helping you accomplish your goals and strengthen the Bradley experience. Please let us know if we can provide information or assistance as you consider ways to help us make a difference. Just call, send an email, or return the attached card. Be sure to request our complimentary brochure, What You Should Know about Recent Changes in the Tax Law. As always, thank you for your interest and consideration.

A Lifetime of Memories How can you forget walking across campus to cheer for the Braves in Robertson Memorial Field House…conducting research on chemotherapy drugs with Dr. Alan Galsky…eating at the original Avanti’s on Main Street…making late-night runs to Dunkin’ Donuts…meeting someone who would become a lifelong friend at freshman orientation? These are just a few of the memories Roberta Cooper Tomlinson ’80 recalls about her Bradley days that began 35 years ago. When it was time to choose a college, Bradley was an easy choice for Tomlinson. “My dad (Robert Cooper ’50) is an alum, Bradley was close to home, and I knew it was a good university,” says Tomlinson, who grew up about 60 miles southwest of Peoria in Astoria. “Being from a smaller high school, I did not like the idea of going to a large state school. At a smaller school, students have more opportunities to be involved.” Tomlinson remembers freshman orientation, when she met Kathy Anderson Hussong ’80, who remains her best friend. They roomed together their junior and senior years in Williams Hall. “College brings lots of opportunities, personally and professionally,” says Tomlinson, who remembers singing in the Bradley Community Chorus and completing an internship at Methodist Medical Center. A biology major, she has worked at Graham Hospital in Canton since June 1981 and now is a blood bank supervisor. “My job still challenges me. I can always learn and also feel like I’m helping someone.” continued on back page

During these times of change and adjustments, the role of charitable giving remains as important as ever. A wide variety of options are available to meet personal needs and philanthropic goals. As one of the supporters who makes our mission possible, we’re convinced that you will find exceptional giving strategies at Bradley University, with unique combinations of tax savings and personal satisfaction. Please contact us if we can help you and your advisors explore the many opportunities to support our work in a personally rewarding way.

The Role of Philanthropy PEORIA, IL 61625 1501 W. BRADLEY AVE. THE CAMPAIGN FOR BRADLEY RENAISSANCE

A


Pathways (Spring 2011)