Are you 70½? IRA Charitable Contributions are now Permanent

The eleventh hour no more.

For several years, Congress would pass legislation in December for that same tax year – and it would be signed into law by the President – extending a tax provision allowing individuals over 70½ to make contributions to charitable organizations, including churches and synagogues, from their IRAs. The distribution would not count as income so it wouldn’t be taxed. Last year, this happened with 11 days remaining before December 31st.

Not a big window of time to take action.

This past week, Congress sent the budget bill – The Tax and Spending Bill – to President Obama for his signature. On Friday, the president signed this bill into law. While the same provision regarding IRA distributions to charitable organizations was included in this budget bill, it is now a permanent part of the IRS Tax Code. No longer will we have to wait until December to hear whether this provision is renewed, and then rush to notify congregants within this age demographic and encourage them to pay their dues, capital/endowment campaign obligations, or just make a generous gift to the synagogue through this vehicle.

So with December 31st approaching, what should you do?

Today, you might consider sending an email blast to the entire congregation letting them know about this advantageous tax and giving provision. Encourage younger congregations to share this information with their parents and relatives. You can encourage congregations 70½ and older to make distributions to the synagogue to pay dues – even pre-pay future dues – or any capital/endowment campaign obligations they might have.

Congregants would have to move pretty quickly to contact the financial institutions that hold their IRAs in order that directives to make such distributions are made by 12/31/15.

Such a notification now is really a way to let congregants know that such a giving vehicle will be permanently available to them in future years. This will give them the ability to consult their tax advisors and plan regarding their future charitable giving.

For congregations that are starting or in the midst of capital/endowment efforts, the IRA distribution can be a part of future solicitation conversations.

Best wishes for a Happy New Year!

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