Good news for seniors 70 and above: Included in the Tax Act last week, the IRA Charitable Rollover provision has been reinstated for 2012 and extended through 2013. This means that taxpayers can benefit their favorite charities like the Salvation Army and potentially reduce their income taxes!
There are at least three ways you can use your IRA to support the important work of charity in 2013.
The new law continues the IRA rollover for 2012 and 2013.
This means that if you are 70 1/2 or older, you can make gifts to charity directly from your IRA in 2013. Your gift will help you meet your annual distribution requirements and you will not have to pay tax on the amount given from your IRA to charity.
The new law has a special provision that allows you to make catch-up gifts from your IRA to charity n January 2013.
You can make a catch-up gift by making a gift directly from your IRA to charity in January 2013. Catch-up IRA gifts will be treated as if you made the gift in 2012. Catch-up gifts must be made by January 31, 2013.
The new law also contains special provisions that may allow you to convert a taxable distribution from your IRA to a a non-taxable distribution.