Tuesday, December 28, 2010

Save on IRA Taxes

I just read in Philanthropy Today that the Obama Administration and the Congress did it again. They passed a tax break for us old people by allowing us to give IRA money tax free to a charity. But, it was so late many of us had already drawn the money out but got no tax break. This bunch of greedy souls in D.C. must be kicked out of office.

Year-End Scramble Made More Intense by IRA Break

December 28, 2010, 10:21 am

By Holly Hall

Many gifts are made in the last few weeks of the year, but even so, fund raisers think Congress may have cut it too close even for procrastinating donors when it waited until mid-December to pass a key charity tax break.
President Obama signed a measure on December 17 that allows people age 70 1/2 or older to make tax-free charitable gifts of up to $100,000 from their individual retirement accounts.

Such a provision has been in effect since 2006, but until mid-December Congress had not taken any action to approve it for 2010 and beyond. Because the renewal of the tax measure came so late in the year, Congress decided to give donors until January 31 to make a gift that would count as a 2010 donation.
But that concession may not have made much of a difference because it probably came well after people had decided to take money from their retirement accounts. People age 70 1/2 and older are required by law to take at least some money out of their accounts every year.

Vaughn W. Henry, a Springfield, Ill., lawyer who specializes in planned gifts, says he doubts many donors will want to tap their accounts for a second time this year. He says he has already met with one such donor who has decided against using his IRA to make a gift in 2010 for that very reason.
But that is not the case for all donors.

1 comment:

Gary Sweeten said...

I just discovered that if you have already taken your required disbursement from the IRA, it cannot be put back into the IRA.


The IRS hates it when we save on taxes.