Posted by Gail Lehrmann (Parker) glehrmann@aol.com
USE YOUR IRA TO MAKE A TAX-FREE CHARITABLE CONTRIBUTION
 
 
After years of contributing to tax-deferred 401(k)s and IRAs, income tax is due on that money when you take withdrawals in retirement. Annual withdrawals from traditional retirement accounts are required after age 70 ½. However, if you are in the fortunate position of not needing your distribution for living expenses and are charitably inclined, you can avoid income tax on your required withdrawal by donating your money directly to a qualifying charity such as The Rotary Foundation.
 
IRA owners must be age 70 1/2 or older to make a tax-free charitable contribution. Those who meet the age requirement can transfer up to $100,000 per year directly to an eligible charity without paying income tax on the transaction. If you file a joint tax return, your spouse can also make a charitable contribution of up to $100,000, meaning couples can exclude up to $200,000 of their retirement savings from income tax if they donate it to charity. Qualified charitable contributions must be made by December 31 each year in order to exclude that amount from taxable income. Charitable contributions can only be made from IRAs, not 401(k)s or similar types of retirement accounts. So, you might need to roll funds over from a 401(k) to an IRA if you want to make tax-free charitable contributions part of your retirement plan.
 
Please consult with your personal advisors for more details.  This is a great way to contribute to The Rotary Foundation and support the Annual Fund (SHARE), polio eradication (matched 2:1 by the Bill & Melinda Gates Foundation), or any of the Six Areas of Focus (does not count toward a Paul Harris Fellow award).