Jim's Tip for July: Use Your IRA Rollover Wisely, and Save on Taxes

This is not a tip for everyone—but it’s one I’ve offered to friends and people of a certain age who’ve asked me for advice a lot—five times in the last month—and each time they’ve thanked me. It has just recently become a permanent benefit so I wanted to share it widely.

Some people who have reached their golden years may have all the income they currently need, but are required to take a certain percentage out of their IRA every year and then pay taxes on that extra unwanted income. . 

Many people I talk to still don’t know that, as of this past December, the IRA rollover is permanent. That means you can, all at once:

  1. Reduce your taxable income

  2. Satisfy your Required Minimum Distribution from your IRA, and

  3. Fulfill your pledge to the Federation, or create a legacy gift or an endowment fund of up to $100,000. You can support any charity with the distribution.

Details:

Gifts made from your IRA (up to $100,000 per year) are not reportable as taxable income. They also qualify for your required minimum distribution (RMD), which can lower your income and taxes. 



  • The IRA rollover allows donors 70½ or older to transfer up to $100,000 directly from their IRA to charity each year.

  • An IRA rollover gift is a tax-exempt distribution. Qualifying individuals can make charitable gifts using pre-tax IRA assets rather than taking a distribution, paying income taxes and using after-tax assets to make a charitable gift.

  • An IRA rollover gift can be used to meet all or part of an IRA required minimum distribution.

  • A permanent IRA rollover will give qualifying individuals certainty, allowing them to better manage their income, taxes and charitable giving. Now you can make the IRA Rollover gift anytime during the year.

  • To make the IRA Rollover gift simply inform your IRA administrator what charity you want to receive the distribution and they will handle the rest.

Two of the couples I talked to have already made a distribution from their IRA, benefiting the charity of their choice now.

To learn more about the benefits of making an IRA charitable rollover gift, please contact your financial advisor or click here.     


Practice empowered philanthropy.


 

Jim Friedman
Director of Gift Planning and Endowments
513-985-1524 | jfriedman@jfedcin.org

 

Debra Steinbuch
Planned Giving and Endowment Manager
513-985-1593 | dsteinbuch@jfedcin.org

 

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