2016 is coming to an end and many of our donors are working out their year end giving. Maybe you are, too. We'd like to share with you how you may use your IRA to fund your charitable giving to the Salvation Army and other charities that you love and support.
A Gift from Your IRA Account
As you may have heard, Congress recently voted to make permanent the charitable IRA Rollover, allowing a taxpayer to make a charitable gift to a charity directly from their IRA account.
There is not much time left in tax year 2016 (and gifts made from an IRA in 2017 cannot be applied to tax year 2016).
How It Works
Individuals age 70 ½ or older are authorized to make tax-free distributions from their Individual Retirement Accounts (IRAs) of up to $100,000 each year to qualified charitable organizations. While these Qualified Charitable Distributions (QCDs) are not tax deductible, they are also not included in the donor’s taxable income. These distributions can also count as the donor’s Required Minimum Distribution for 2017.
Important Notes on This Year's Extension
- In order to qualify for a 2016 rollover, the QCD payment must be delivered to The Salvation Army or another favored charity by your IRA Administrator on or before December 31, 2016. If interested, please contact your IRA Administrator now.
- If you made a direct distribution from your IRA to a qualified charity earlier in 2016 in anticipation of rollover authorization by Congress, that distribution (up to $100,000) will qualify as a QCD, provided all other requirements are met
- Required Minimum Distributions already withdrawn from your IRA in 2016 cannot be re-characterized as QCDs, even if you write a check to a charity in an equal amount
If you are considering making a gift to the Salvation Army using your IRA assets, please let us know. We will be very thankful for your generosity. You could use the carefully worded letter below to give to your IRA administrator make this request.