TAKE ADVANTAGE OF THIS OPPORTUNITY, AS CONGRESS JUST PASSED A BILL TO RETROACTIVELY ALLOW AN IRA ROLLOVER THROUGH DECEMBER 31, 2014.
This page is intended to outline briefly a technique under which you can benefit the Museum and achieve additional tax advantages over and above those that apply to some other charitable gifts.
Because like other charities the Museum relies heavily on the generosity of its members and support to fund its educational initiatives, public programs, and special exhibitions, as we approach year end, we thought the opportunity to outline this idea would be timely.
If you, your spouse or someone you know is interested in supporting the work at the Museum, is 70½ years of age or older, this unique opportunity is available only through December 31, 2014.
How much can be given under this provision? Usually, all funds distributed from an IRA account, except certain non-deductible contribution amounts, must be reported as taxable income when received. Under this special provision of the Tax Code, an individual who holds an IRA can make a tax-free charitable contribution from his or her IRA of up to $100,000 for 2014.
What are the benefits? Such a contribution offers two significant tax advantages. The donor does not need to recognize taxable income if the gift from one’s IRA goes directly from the IRA provider to a charity, such as the Museum. The exclusion from income often yields an even better result than an itemized charitable deduction in that: (1) it is not subject to percentage of income limitations applicable to itemized deductions, (2) the distributed amount also satisfies a donor’s minimum required annual distribution from his or her IRA, and (3) the tax benefit of charitable and other itemized deductions can be reduced or “eroded” as income increases.
How is it done? Individuals can easily make charitable transfers directly from IRAs, but only IRAs. Retirement assets held in a profit sharing, pension, 401(k), 403(b), or similar account must first be rolled over into an IRA in order to take advantage of this opportunity.
Will such a gift qualify as my minimum required distribution? Beginning in the year after each individual reaches age 70½, he or she must take an MRD annually from his or her retirement plan. The direct charitable IRA gifts count towards the individual’s minimum required distribution for the year of the gift, and may eliminate the MRD altogether if the MRD is under $100,000.
State Taxes. Many states tax IRA distributions. Some do not. Some of the statutes that do have income taxes, base their tax on federal taxable income. Some states also limit itemized deductions. In many states the direct gift concept can provide additional state income tax advantages. Since state laws vary quite a bit, you should check with your attorney or tax advisor about the taxation and deduction implications where you live.
Limitations Apply. The special provisions outlined above work for almost all IRAs. However, SEP plans and simple IRAs are excluded. If you have one of these plans, consult with your counsel or tax advisor on how best to make a charitable contribution.
The Museum's Federal Tax ID# is 23-7379280
Thank you for your continued support of the Museum’s mission. To discuss a transfer with a member of the Museum’s staff, please contact:
Jim Gerhardt, Chief Advancement Officer at 215.923.3811 x 133 or email@example.com
Cobi Weissbach, Associate Director of Development at 215.923.3811 x 131 or firstname.lastname@example.org
Ilana Dean-Schmidt, Major Gifts Officer at 215.923.3811 x 111 or email@example.com
Remember, unless Congress acts to extend this tax advantaged opportunity, it will end after December 31, 2014.This is not intended to be legal or tax advice. We encourage you to consult your own legal or tax advisor to see how you may be affected by this law.