IRA Charitable Rollover Provision Extended

The holidays are a busy time of year, but with 2014 year-end less than two weeks away, it makes sense to take some time to finalize your charitable giving plans.  I have some good news for you. The Senate passed a one-year tax extenders bill and today the President signed H.R. 5771 officially extending the IRA Charitable Rollover Provision through December 31, 2014.

The charitable IRA rollover, enacted in 2006, encourages older Americans to give out of their Individual Retirement Accounts. IRA owners age 70 ½ or older can give up to $100,000 a year from IRA income if the funds are paid directly to a charity. This allows the IRA owner to exclude this from income and make the donation without paying tax on the income.

If you are a taxpayer who does not normally itemize your deductions it is a winning situation because you don’t get to deduct your contributions anyway. Or, if you are a taxpayer who usually itemizes it may leave you ahead by not pushing you into a higher tax bracket due to receiving the IRA income.

Either way it is a win for charities and ultimately our community. If you are interested in rolling over your IRA distribution please contact the Whitefish Community Foundation to plan your gift. You should instruct your financial advisor to make the distribution check out to the Foundation.  Your gift can be directed in the following ways:

1. Your Gift can go directly to the Whitefish Community Foundation Endowment Fund. Each year the Foundation’s permanent Endowment Fund provides funding to the Community Grant Programs. A gift to Foundation’s Endowment Fund is a gift that will keep on giving and benefiting our community in perpetuity.

2. Your Gift can go to the Community Grants Fund to benefit over 75 nonprofits and programs in 2015 – a great way to really impact your community.

3. You can setup a designated fund with your gift with instructions to make gifts to your selected charities each year until the fund runs out. If the rollover provision is extended in future years you can also add to this fund with more gifts.

4. You can designate the entire amount to selected charities and the Community Foundation will send out grants in your name or you can remain anonymous.

No matter what your preference is, the Community Foundation is here to help you simplify and strategize your charitable giving for smart year-end tax planning. Remember, it is generally advisable to engage tax and investment professionals to “run the numbers” before making final decisions.