On October 3, 2008 the Emergency Stabilization Act of 2008 was signed into law which included a provision that permits charitable contributions from an IRA. In these challenging economic times, many donors are exploring new giving alternatives to continue their ongoing support of United Way. The IRA charitable rollover may be something you should consider.

The initial act expired December 31, 2007, but the new legislation extended the provision during 2008 and 2009. If you are over 70½, you are eligible to make an IRA charitable rollover to United Way. And the good news is that your IRA distribution to us will be similar to other IRA rollovers — it will not be included in your Federal taxable income.

While there is no added deduction for an IRA charitable rollover, avoiding an additional $100,000 of taxable income may save substantial income taxes not otherwise available. An added bonus is that your IRA charitable rollover this year will qualify for all or part of your required IRA minimum distribution. 

Who may want an IRA rollover? Charitable IRA rollovers will be popular for at least five reasons:

1. Convenience – It is a very simple and easy way to make a gift.

2. Standard Deduction Benefit – With an IRA charitable rollover, you may take the standard deduction. Since the IRA rollover is not on your return, it may reduce your taxes.

3. Lower Tax on Social Security – Because of an IRA distribution, you may be paying tax on 85% of your Social Security. Using the IRA charitable rollover may lower your income and only 50% of Social Security is taxable.

4. No Giving Limits – With an IRA charitable rollover, you may give more than the usual deductible amount of 50% of income.

5. Lower Income Level Saves Tax – Persons with higher incomes often lose part of their charitable deductions and other tax benefits. Using an IRA charitable rollover for part or all of your IRA required distribution may lower your income and save taxes.

Your IRA charitable rollovers during 2008 or 2009 could be $1,000, $5,000 or any amount up to $100,000. We recommend that you discuss the benefits of an IRA rollover with your CPA or tax advisor.

Jim Skinner, Vice Chairman and CEO of McDonald’s Corporation hosted a Tocqueville Society reception on January 29, 2008. We would like to thank Mr. Skinner for a very educational event and would like to thank our corporate partners, Tocqueville donors, and volunteers for braving the weather to attend this special event.  Take a look at our pictures from this great event under the “Photos” tab!