If you are 70½ or older, you may be interested in a way to lower the income and taxes from your IRA withdrawals.
Through an IRA Charitable Rollover, you can transfer up to $100,000 a year directly from your IRA to a qualified 501(c)(3) nonprofit, such as Community Legal Aid. The amount of the transfer will not be included in your taxable income and the transferred amount can count towards your required minimum distribution.
FAQ's
Who qualifies?
Individuals who are 70½ or older at the time of the contribution.
From what accounts can I make transfers?
Transfers must come from your IRAs directly to the charity. If you have retirement assets in a 401(k), 403(b), etc., you must first roll those funds into an IRA, and then you can direct the IRA provider to transfer the funds from the IRA directly to the charity.
To what charities can I make gifts?
Tax exempt organizations that are classified as 501(c)(3) charities, to which deductible contributions can be made.
What are the tax implications to me?
Federal
The transfer to the charity is not recognized as income, provided it goes directly from the IRA provider to the charity.
State
Each state has different laws so consult with your own advisors.
Does this transfer qualify as my minimum required distribution?
Yes, once you reach 70½, you are required to take required minimum distributions from your retirement plans each year, according to a federal formula. IRA Charitable Rollovers count toward your required minimum distributions for the year. For people over age 70½ who would not otherwise be able to deduct their charitable contributions, the IRA qualified charitable distribution technique allows them to see the benefit of their gift, satisfy their required minimum distribution, and not have the distribution counted as income.
Questions?
Contact Chief Development Officer Shirley Smith at (330) 983-2602.
This information is not intended to be individual legal or tax advice. As always, please consult your tax advisor.
Community Legal Aid is a 501(c)3 nonprofit organization, Federal ID# 34-0753560.
Thank you for generously supporting the critical work of Community Legal Aid!