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IRA Charitable Rollover Available Through December 31

December 23, 2009 — If you are age 70½ or older, there is still time to directly transfer up to $100,000 tax-free to charity. The IRA Charitable Rollover provision remains in effect through the end of the year.

By not including your IRA withdrawal in the income you report for the year, you effectively receive a charitable deduction before calculating your adjusted gross income for tax purposes. Read More

Only transfers from a traditional or a Roth IRA are permitted. The IRA charitable rollover provision is especially beneficial to those who do not itemize tax deductions and would not otherwise receive any tax benefit for charitable contributions. Further, the 2006 Pension Act permits the IRA holder to make the contribution directly to a qualified charity from his or her IRA and the contribution is not then treated as a taxable IRA distribution, thereby avoiding any state or local tax imposed on IRA distributions.

Note that an IRA holder who collects Social Security is required to take the required minimum distribution (RMD) from his or her IRA at age 70½. This mandatory distribution could increase income to where a portion of the Social Security benefit is taxable as well. Through the IRA charitable distribution provision, the IRA holder may reduce his or her total income and thereby reduce or eliminate the taxes imposed on Social Security benefits.

You are encouraged to contact a tax advisor to discuss your best giving options and strategies. You may also contact EAA’s Donor Relations Department at 800-236-1025 or development@eaa.org for assistance.

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