If you are a charitable gifter, over the age of 70 ½, and own an IRA then you need to know about the most recent changes make by Congress with regard to charitable gifting from an IRA. While anyone who plans to give to charity from an IRA should understand the new rules, older Americans are specifically impacted.
Most IRAs, with the exception of Roth IRAs, require the account holder to begin taking distributions when he or she reached the age of 70 ½. These mandatory distributions are taxable and may have a significant impact on your finances because they will raise your adjusted gross income for the year. That, in turn, can cause things like your Medicare premiums to go up or otherwise impact your eligibility for assistance programs. One option is to gift the required distribution to charity.
Among the many rules in the agreement reached by members of Congress with regard to the impending “fiscal cliff” was a provision that allows taxpayers to transfer up to $100,000 from an IRA to a charity. Similar provisions have been part of the tax laws in the past. This provision applies to 2013 but may also apply retroactively to 2012 for some taxpayers. Only account holders who waited until December to take their required distribution for 2012 are eligible to use the 2012 contribution; however, anyone can take advantage of the 2013 option.
- Dynasty Trusts - April 26, 2021
- Joint Tenancy Problems in Estate Planning - April 22, 2021
- Staying Current is Especially Important in the Pandemic - November 17, 2020
