Tax-Break for Charitable IRA Distributions Reinstated – But Act Fast for 2012
You can still make this type of contribution for 2012 as long as you do so before February 1, 2013.
Since 2006, taxpayers at least 70 ½ years of age have been able to make charitable contributions of as much as $100,000, directly from their retirement accounts, without having it affect their adjusted gross income. There were a number of good tax-saving reasons that people took advantage of this law, but here is the kicker — it was supposed to expire at the end of 2011. Which means there was no reason for anyone to make such a contribution in 2012 – until it was reinstated as part of the American Tax Payer Relief Act in January 2013.
Well, that wouldn’t seem to help anybody, but this new legislation gives us a fleeting chance, here’s why:
- You can still make this type of contribution for 2012 as long as you do so before February 1, 2013.
- Also, if you waited until December to take distributions from your IRA, you can donate that money to charity before January 31, 2013 and receive the same treatment.
- A word to the wise for 2013; you must do it the usual way – by asking the IRA custodian to send the distribution directly to the charity.
Have additional Questions? Contact H&S Tax Professional Scott Hunt at 231.798.6508.
Scott Hunt
Certified Public Accountant
231.798.6508
scotth@hscompanies.com
