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Seniors whose retirement plan assets have suffered in the market downturn have been given a chance to recoup from their losses this year. The federal government has suspended the required minimum distribution in 2009 for those age 70½ or older. While you are still free to make withdrawals from these accounts, it is no longer compulsory during this one-year period. This could translate to tax savings for you as IRA withdrawals are reported as income and taxed at ordinary income tax rates.
The provision that allows individuals age 70½ and older to make charitable gifts directly through their IRA remains. While a gift to Ligonier made through your retirement plan does not qualify for a charitable deduction, you will owe no income tax on this distribution as it is made directly from the custodian of your account to the ministry. This option may be particularly attractive to friends who are limited on the amount of charitable gifts they can deduct as well as those who do not itemize their charitable deductions. In addition, donating from IRA accounts could limit estate tax and the tax impact of those assets on heirs.
For example, Mr. Hill is 82 and has been extremely philanthropic this year. He has already reached the limit on the charitable deductions he can take in 2009. On the other hand, 75 year-old Mrs. Brown is not concerned with deducting her donations for tax purposes so does not itemize her gifts to charity. Both may wish to take advantage of this opportunity and request that a gift be sent directly to Ligonier Ministries from their IRA accounts before December 31, 2009.
As you consider the benefits of making a gift to Ligonier from your retirement funds, remember:
- you must be age 70 ½ or older at the time you make the gift.
- the total of your IRA donations for the year cannot be more than $100,000. Couples with separate IRA’s are each eligible to give that amount.
- your gift must come from a traditional or Roth IRA. Pension plans or 401K’s do not qualify.
- to contact your IRA administrator to make the gift directly from your account to Ligonier.
We recommend that you consult with your financial advisor to be certain you qualify for this opportunity and that it would benefit you. For additional information, or should you decide to take advantage of this incentive, please contact Randi Walter, Director of Stewardship by email or by phoning 1-800-220-7636 ext. 1182. |
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