WILL COUNTY, IL (January 28, 2013) – Local charities and donors can benefit from an extension of a popular tax-law provision, known as the “IRA Charitable Rollover.”
The IRA Charitable Rollover permits individuals age 70 1⁄2 or older to direct distributions of up to $100,000 from their IRA directly to a qualified charity and exclude the payout from their gross income.
The extension allows donors to make tax-free contributions retroactive to 2012 and in 2013. If an individual took mandatory IRA distributions in 2012, the individual can transfer the amount in cash before February 1, 2013 to an eligible charity and count it as a 2012 Charitable Rollover. Charitable Rollovers can be made before February 1, 2013 and choose to have them treated as having happened in 2012. Individuals can also make a distribution in 2013. And if a donor decided to make a Charitable Rollover in 2013 for both 2012 and 2013, they could help the charities they believe in twice in the same calendar year.
How do donors benefit? Although the gift can’t be claimed as a charitable deduction, the payout doesn’t count as taxable income, either. So an IRA donation doesn’t raise adjustable gross income. In addition, the donation can count as part of the IRA owner’s required annual withdrawal. So a charitably minded individual, 70 1⁄2 years or older, with an IRA who must take funds can divert part or all of it to his favorite causes without taxable income on the payouts.
Contributions of an IRA Charitable Rollover cannot be made to a private foundation or a donor-advised fund, but The Will County Community Foundation can help donors and their professional advisors execute the transfers and choose from several charitable fund options for their gifts. For some, this is a once–in-a-lifetime opportunity to create an endowment to benefit the community now and forever. Through The Will County Community Foundation, donors of an IRA have several options to support charitable causes and community needs, including those that cannot be anticipated at the time your gift is made through vehicles such as:
• The Foundation’s Unrestricted Funds that allow for response to emerging needs, and funding for new and innovative programs – both today and tomorrow • The Foundation’s General Endowment Fund to support our annual grantmaking to local nonprofit organizations • A Designated Fund to benefit a favorite charity • A Field-of-Interest Fund to target gifts to support causes close to a donor’s heart such as health, education, human services and the arts.
“There is time to take advantage of this window of opportunity. The opportunity to apply IRA Charitable Rollover contributions for 2012 will close after January 31, 2013, but the law will be in effect throughout the 2013 tax year.” said Michael Trench, The Will County Community Foundation executive director. If we can help, please contact Michael Trench at The Will County Community Foundation at 815-744-9223 or firstname.lastname@example.org.
With more than $1.5 million in assets, and distributions of more than $823,000 in grant awards through the competitive grant program since 2006, The Will County Community Foundation is actively “Connecting people who care to cause that matter.” As an Affiliate of The Chicago Community Trust, The Will County Community Foundation represents not only the Trust’s interests in promoting and advancing philanthropy throughout the region, but have available the resources and expertise that have made The Chicago Community Trust a philanthropic leader for nearly a century.