2410 S. 9th St. Lafayette, IN 47909 765.474.7500

Thank You Congress



Thank You Congress

 

I do not think our congressmen and women hear this often, but THANK YOU!!! On Friday, the President signed the Protecting Americans from Tax Hikes Act of 2015 into law. Among its provisions was a permanent renewal of the charitable IRA rollover opportunity for donors who are past age 70-1/2. Since it’s inception in 2006, the IRA rollover has been thrown into an endless cycle of expiration and reinstatement. Just in time for the end of the year, congress took away the expiration date!

Does a tax-free charitable IRA rollover matter to me? 

Not everyone may benefit, but if you are 70-1/2 or older, I would encourage you to continue reading. The charitable IRA rollover allows donors to make charitable gifts directly from an IRA to a charitable organization and pay no income tax. There are several reasons you may want to consider using this planning tool:

  1. Great way to support your cause while saving on your income taxes.
  2. The amount sent directly to a charitable organization counts towards your Required Minimum Distribution.
  3. You no longer claim itemized deductions on your federal tax return, want to support your favorite charity (LCSS), and receive tax savings on your income taxes.

Rollover Review

IRA Rollover

IRA Rollover

  • The rollover is ONLY available from IRA accounts. This cannot be done directly from other retirement accounts such as a 401(k) or 403(b) accounts. [You may be able to complete a two-step process by making a tax-free rollover from these accounts into an IRA and then make an IRA rollover gift from the new account.]
  • You must have reached age 70-1/2.
  • You can make IRA rollover gifts of up to $100,000 per year. Married couples can each give up to $100,000 as long as you each have IRA accounts.
  • Donations may be made to one charitable organization or divided and distributed to several organizations.
  • Rollover gifts cannot be used to fund charitable gift annuities or charitable remainder trusts. They also cannot be transferred to donor advised funds.
  • You cannot receive any value in return for the gift.

An IRA is a great way to save for retirement and defer taxes. It is also a another great way to support your favorite cause (yes, we know it is the Lafayette Catholic School  System) while saving income taxes. If you have any questions or comments, please do not hesitate to contact our office (765) 474-7500 or your tax professional. Have a Merry Christmas and Happy New Year!!!


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