Are you at least 70 ½, and want to build regular charitable contributions into your legacy plan using excess funds in your IRA?
In the past, you had to worry that the government might decide that donation was considered taxable income, which meant you would either had to either contribute more to cover the shortfall or give simply give less.
The good news is you never have to worry about that again because the Federal Government has made a permanent change to IRA gifting. Starting 2016, charitable donations of up to $100,000 per year made from your IRA funds are no longer subject to any tax because the donation is excluded from your taxable income. That means, for those of you so inclined to give-back, you can integrate a regular annual donation into your retirement plan.
And, since the law refers to Individual Retirement Accounts, your spouse can do likewise with his or her IRA funds.
A little good news for your kids….
There’s also a provision in the new law that you might want to mention to your children who are putting aside money in their IRA or in a 529 plan for their kids. The cost for computers, software, and even internet access can now be withdrawn from accumulated savings tax and penalty free — even if the school your grandchildren attend do not require a computer as a condition of enrollment.