Charitable Giving and your IRA
News from the Diocesan Mailbag!
The IRA charitable rollover law was extended as part of a larger tax package in 2015 and was made permanent.
Under this legislation, if you are 70 ½ or older, you are allowed to make certain charitable contributions directly from your Individual Retirement Account (IRA) to an eligible charity, and the transferred assets will not be recognized as income for tax purposes.
As a rule, withdrawals from IRAs are taxed as income; you would receive a tax deduction for your donation, but other federal, and sometimes state, tax rules can prevent the deduction from fully offsetting taxable income.
The charitable IRA rollover, or qualified charitable distribution, makes it easier for you to use your IRA assets to make charitable gifts. It is a special provision that allows individuals age 70 1/2 or older to exclude from taxable income—and count toward their required minimum distribution—transfers of IRA assets, up to a total of $100,000, that are made directly to public charities, such as your parish or favorite Episcopal charity, including the Episcopal Church Foundation.
To take advantage for 2016, donors need to arrange a direct transfer from their IRA to an eligible charity by December 31, 2016. Talk with your tax adviser!