As we begin the new year, we thought you would like some timely information about an important provision of the new tax law and IRA distributions that may benefit you with income tax savings.
If you are at least age 70½, you can reduce or avoid paying income tax on your required IRA distribution when you redirect all or a portion of it to a 501(c)(3) charity.
If you are at least age 70½, you can reduce or avoid paying income tax on your required IRA distribution when you redirect all or a portion of it to a 501(c)(3) charity.
But you will need to act by January 31 for it to apply to your 2012 taxes.
Here’s how it works:
- Ask your IRA custodian to write and send your distribution check directly to your favorite charity (we hope that’s Hospice Foundation).
- According to the IRS rules, you are allowed up to $100,000 directly from your IRA and you will avoid paying any income taxes on this “qualified charitable distribution.” (Keep in mind that since you are redirecting your IRA distribution to your charity, it will not count as income to you. Therefore, you will not receive an additional charitable income-tax deduction later.)
- Your IRA distribution redirect must be made by January 31, 2013 for it to apply against your 2012 taxes.
If you have already received your 2012 required minimum distribution, you are still allowed to transfer these funds to your the 501(c)(3) charity of your choice by January 31. You will not have to report it as income for 2012.
Similarly, you may also redirect your 2013 distribution at any time during the year and into January 2014, and avoid reporting the required distribution as income for 2013.
If you consider taking advantage of this provision in the new tax law, we hope you will consider Hospice Foundation as the charity of your choice and continue your support of compassionate, end-of-life care in your community.
Please call Lisa Bennett at Hospice Foundation 831-333-9017 for more information.
Thank you very much for your support and Happy New Year!
