The Internal Revenue Service has announced that tax-free transfers to charity have been renewed for IRA owners age 70 Â½ or older. If you fall into this category, you will have until Wednesday, December 31 to make your direct transfer part or all of your IRA distributions to an eligible charity.
This extension is thanks to the Tax Increase Prevention Act, which went into effect on December 19. The provision that authorized these qualified charitable distributions had originally expired at the end of last year, but the Act allowed for retroactive renewal.
The IRS says IRA owners age 70 Â½ or older can make direct, tax-free transfers up to $100,000 per year to a qualifying charity. This option can be used for distributions from IRAs whether or not deductions are itemized. Be aware that distributions from employer-sponsored retirement plans such as SIMPLE IRAs and simplified employee pension (SEP) plans do not qualify.
For more, visit the IRS website.