WHITE PLAINS, N.Y., DECEMBER 4, 2006 – The new Pension Protection Act of 2006 allows seniors to give to charity rather than pay taxes. The act encourages charitable donations by allowing seniors to make a tax-free gift from their IRA funds to the charity of their choice this year.
IRA owners who are 70 ˝ years old or older can now make a direct transfer to a charity without creating an income tax burden for themselves. For many seniors who are required by law to withdraw money from their IRA, this new law will prevent them from being pushed into a higher tax bracket. The maximum transfer amount in the calendar year is $100,000, but gifts to charity can be made in any amount.
Retirees who are interested in making a charitable gift should contact their financial planners right away because the law only applies for two years (2006 and 2007), and then the opportunity disappears if not extended by Congress, says Joel Preston, vice president of Major Gifts for the March of Dimes.
“This could be a terrific benefit for retirees who, in the past, would have had to take a distribution from their IRA and include it as taxable income before making a charitable donation,” says Mr. Preston. “From our point of view this is a wonderful opportunity that helps both retirees and the children of the future.”
To make a gift, anyone over the age of 70 ˝ should begin by contacting their IRA custodian to learn how to transfer the desired amount to an eligible organization such as the March of Dimes. It could be as simple as completing and signing a one-page form. For more information on how to give to the March of Dimes go to marchofdimes.com/ira.
The March of Dimes is a national voluntary health agency whose mission is to improve the health of babies by preventing birth defects, premature birth and infant mortality. For more information, visit the March of Dimes Web site at marchofdimes.com or its Spanish language Web site at nacersano.org.
