Health & Fitness
IRA Charitable Rollover – A Powerful Win-Win for Union County Residents
You may be able to transfer as much as $100,000 a year from an IRA directly to a qualified charity without having to count any of that transfer as taxable income.
As part of the "fiscal cliff" deal, Congress has resurrected a popular
tax-law provision, known as the "IRA charitable rollover," that had
expired at the end of 2011. The rule allows many investors 70½ or older
to transfer as much as $100,000 a year from an individual retirement
account directly to a qualified charity without having to count any of
that transfer as taxable income.
Tax law and sausage. Two things you should never watch while being
made. However, the recent tax law contains at least one healthy
ingredient: the IRA Charitable Rollover.
This may not be a new revelation, but it bears repeating. It is just
that good. The reinstitution of the IRA Charitable Rollover will benefit
many qualifying taxpayers and their favorite charities alike. An
article in The Wall Street Journal titled “IRA Charitable Rollover Is
Back” provided an excellent, brief summary of the practical points you
should know.
Find out what's happening in Scotch Plains-Fanwoodwith free, real-time updates from Patch.
Until the end of 2011, you could “rollover” the required minimum
distribution (RMD) from your IRA directly into the charity of your
choice. Consequently, you avoided income taxation on that amount. But
what about tax year 2012? Until the American Taxpayer Relief Act (ATRA)
was passed on January 1, 2013, and subsequently signed into law the next
day, this opportunity for 2012 did not exist. It had expired.
Now that ATRA is law, however, if you are age 70 ½ or older you can
once more kill two birds with one stone and rollover funds from your IRA
directly to a charity for 2012. That’s right, there is a limited window
open to go back to 2012 (figuratively speaking) and make a qualifying
charitable rollover from your IRA.
Find out what's happening in Scotch Plains-Fanwoodwith free, real-time updates from Patch.
As noted in the article cited above, taxpayers who took their RMDs late
in December while awaiting resolution of the “fiscal cliff” debacle may
still re-characterize that withdrawal into a rollover if they act now!
However, this opportunity expires at the end of this month.
For further information and a free initial consultation, please contact me via my website: www.millsestateplanning.com.
Reference: The Wall Street Journal (January 6, 2012) “IRA Charitable Rollover Is Back”
