Last chance for tax-beneficial IRA-to-charity contributions?

Unless Congress acts to again extend the expiration date, 2011 may be the last year those age 70½ and older will benefit by making contributions of up to $100,000 directly from their IRA to a qualified charity.

This type of direct IRA-to-charity contribution has several advantages:

  1. The amount withdrawn from your IRA counts toward your required minimum distribution for the year.
  2. The amount withdrawn from your IRA does not increase your adjusted gross income (AGI), so for example, your medical deductions and other tax calculations based on AGI or modified AGI will not be adversely affected.
  3. You do not need to claim a charitable contribution deduction, so it does not matter whether you itemize your deductions.
  4. Residents of states that base state income tax on federal AGI and do not allow charitable contribution deductions may receive a state income tax benefit.

Because the contribution must be made directly from your IRA custodian to the charity you select, you should contact your custodian to determine the last date by which they must receive your directions to effect the transaction prior to the end of the year. Most custodians require several days to a few weeks advance notice of your intentions.

© 2018 Apex CPAs & Consultants, Inc.   |   1652 E. Main Street, Suite 100, Saint Charles, Illinois 60174  |   Tel 630.584.4555
Admin   |   Upload Docs  |   Client Login