IRA and 401k Retirement Tax Benefits From The Legacy Circle

Thu, 11/02/2017 - 8:05pm -- Anonymous

Just over a year ago, I turned 70 and a half.  I probably would have never thought about it– except my tax accountant had warned me that this was a very big “birthday.”  From here on, she told me, I would have to take a “Required Minimum Distribution” (RMD) from my retirement plans each year, in an amount set by law.  This was a life cycle event that hadn’t even crossed my mind.

Although I am still working, I now have to start paying taxes on my own money that I had put into these plans; and I have to take out money from these plans every year -- money that I don’t need to live on; and it’s taxable! This means I’ll be in a higher income tax bracket than I had planned on for this year, resulting in more federal and California income taxes, and reduced itemized deductions.

You may be in the same boat.  The good news is that there’s a way that we can avoid all of these hassles, and turn our RMD into a mitzvah.

The law allowing tax-free charitable IRA gifts is now permanent. If you are age 70½ or older, you can make tax-free gifts totaling up to $100,000 per calendar year directly from your IRA to Congregation Rodef Sholom, and other qualified public charities.

    Make a tax-free charitable IRA gift by year-end and:

  • Reduce your taxable income

  • Satisfy your required minimum distribution

  • Support your synagogue’s current programs, or choose to help build our endowment for future generations

    To qualify:

  • You must be 70½ years of age or older when the distribution is made. If you are married, your spouse may be eligible to make such gifts up to $100,000 from his/her IRA as well.

  • The transfer must go directly from your IRA to Congregation Rodef Sholom.

  • Your gift must be outright. Tax-free charitable IRA rollover gifts cannot be used to fund a gift annuity, charitable remainder trust, a donor advised fund, or a private foundation.

The deadline for doing this each year is December 31, so please act now.

If you can help our synagogue in this way, act now!  Talk to your plan custodian or financial advisor, and get the details; or call the synagogue, and we can help.  Call Michael Kamler at 415 479 3441, or email him and we will get you the help you need.

Have a wonderful and safe new year filled with peace and happiness!