As we approach the end of the year, you may be considering a charitable gift. Remember that gifts made now could generate income tax deductions that may help reduce your tax bill for 2018.
For donors who qualify, an IRA Charitable Rollover allows a tax-free transfer directly from a taxpayers’ IRAs to qualified charities, like Texas State University, without income tax consequences. If you’re wondering if an IRA Charitable Rollover is right for you, consider the following requirements:
- Age requirement. The donor must be 70½ or older at the time of the gift.
- Limited to IRAs. Only traditional IRA accounts may be used.
- Rollover Cap. Each taxpayer may transfer up to $100,000 per tax year.
- Qualified Charities. Only ‘public charities’ will qualify. Private foundations, donor advised funds, and supporting organizations do not qualify.
- Direct Transfer Required. Distributions must be made directly to the public charity from the IRA by the IRA administrator.
- No Goods of Services Received. The taxpayer may not receive any goods or services in exchange for the IRA Charitable Rollover.
The effect of a qualified IRA Charitable Rollover is that the money distributed to the charity will not count as income for the donor, but it will count towards the donor’s annual required minimum distribution. If you are one of the many seniors who will not itemize deductions because of the 2017 federal tax reform, this may be an excellent way to minimize taxes and maximize your charitable impact. If a year-end gift to Texas State University or another public charity is in your plans this year, consider the IRA Charitable Rollover.
To arrange an IRA charitable rollover, contact your IRA provider. For more information about making a gift to a program or project important to you at Texas State University, please contact Dan Perry, Ph.D., assistant vice president for University Advancement, at 512-245-4440.