Last Chance for IRA Transfers to Charity
As the clock ticks down toward year end, those of you considering the use of IRAs to fund charitable gifts need to get cracking.
If you’re age 70-1/2 or more, and want up to $100,000 of that IRA to go to your favorite charity (because you really don’t need the dough, even though Uncle Sam requires that you take a minimum distribution each year) get it done by December 31, 2011, and if you handle the transfer correctly, exclude the transfer from recognition as part of your adjusted gross income.
The place to start is to provide written instructions to your IRA custodian, and check with your tax pro from there.
And while we’re on the subject of retirement, those of you still working will want to be sure to note that the FICA wage base will go up, in 2012, from the present $106,800 to $110,100, or an increase of a little over 3%. And the tax hit may also increase more, in absolute dollar terms, if Congress does not act to extend the 2 percentage point FICA tax “holiday” which prevails in 2011.
Some good (recent) news has come down from IRS regarding cost of living adjustments in 2012, which will be allowed in measuring contributions to various retirement plans.
If you’re fortunate enough to have a “defined benefit” plan in place in your business, know that the limitation on the annual benefit which the plan may provide will increase from $195,000 to $200,000. And for the more common form of plan (the “defined contribution” plan often used by sole proprietors and other smaller businesses), the limit on annual additions (for which a tax deduction is available) to a participant’s account will increase from $49,000 to $50,000.
And we’re sure all of you will be pleased to note that the Taxpayer Advocacy Panel (TAP) has recently released its 2010 annual report, featuring such important recommendations for enhancement of IRS “customer service” as the need to improve signs and visual communications in Taxpayer Assistance Centers. And take solace in the knowledge that other recent TAP activities have included teaming with the IRS on a number of special events, including Town Hall Meetings, Tax Forums, Earned Income Tax Credit Awareness Days, and IRS live webinars!
Notwithstanding the above, the TAP has made some important contributions – check out their full report at www.improveirs.org.
CONSULT YOUR TAX ADVISOR – This article contains general information about various tax matters. You should consult your CPA regarding the implications to your own particular situation.
Jeff Quinn, the author of this article, is a shareholder in Ashley Quinn, CPAs and Consultants, Ltd., with offices in Incline Village and Reno. He may be reached at 831-7288, welcomes comments at firstname.lastname@example.org, and invites readers to consider his other commentary at http://blog.nolo.com/taxes.