Make a tax-free contribution to Harmony Foundation from your IRA before 12/31 deadlinePosted on
A few Foundation donors, who are professionals either in finance or tax, have told us about a distinct tax advantage to individuals over 70 ½ years of age.
Arne Themmen, the newest member of Harmony Foundation’s Board of Trustees, sent me a brief description of this arrangement, and I wanted to share it with you in hopes you will find it helpful.
For anyone over 70 and ½, the current tax regulations allow you to make a tax-free contribution to a charity, up to $100,000, from your traditional IRA. This contribution can reduce or eliminate your required minimum distribution and will reduce the amount of ordinary income you must report on your personal income tax return. This is a dollar for dollar reduction in your taxable income. A cash gift of funds, non-IRA, after tax can only be reported if you itemize deductions and the benefit is limited to a percentage of your adjusted gross income.
In order to avail yourself of the benefit of an IRA contribution to charity, the distribution must be made in cash by the IRA trustee or custodian directly to the charity. Fortunately, the custodian brokerage firms and trustee banks will provide you with the form to use, upon request. This charitable gifting benefit has not always been available and can be eliminated by Congress at any time. Important: contributions of this type must be made before 12/31/2013 to be claimed in 2013.
We have received some generous contributions from financial professionals who used this arrangement to make their gift to Harmony Foundation. They found considerable tax savings using this provision in the tax code, and were able to pass that along to the Society that has meant so much to them.
I invite you to consider if this is right for you as you contribute to Harmony Foundation in 2013. For further information please contact rkilleen@HarmonyFoundation.org
All my best,
President and CEO