Less than two weeks remain to save money on your 2012 taxes. Here’s an idea than can help…
Rim Country Educational Foundation deeply appreciates the support of all who contributed to our successful fundraising efforts in 2012. From a variety of sources – – personal donations, small groups efforts, and government grants – – we raised $153,000 to support the foundation’s mission of improving educational opportunities for Rim Country youth and our vision of bringing a university campus to Payson. Thank you for demonstrating your commitment in so many meaningful ways.
The generosity of our townspeople of all ages has been quite gratifying. High school age youth, and even younger, actively supported the process, contributing both time and money. As might be expected, some of our larger donors are older. Respectfully, this message squarely targets those who are age 70 ½ or older, and taking Required Minimum Distributions (RMDs) from their IRA accounts. RMDs are minimum distributions that must be calculated each year by IRA account holders, and must be made by December 31st of the year following the year in which the account holder turns age 70 ½.
We want to make you aware of a tax planning provision called a Qualified Charitable Distribution, or QCD. When you make a QCD, all or a portion of your Required Minimum Distribution is donated to the charity of your choice. (Of course, we hope you will select Rim Country Educational Foundation as your designee!) Your QCD is excluded from your gross income for federal tax purposes, and the amount counts towards fulfilling your RMD requirement for the year. This form of IRA distribution is not reported as income, so you can’t claim a charitable deduction for a QCD. Conversely, by making a QDC you do not need to itemize deductions to allow your charitable contribution reduce your taxes.
Earlier this month, Congress finally passed the American Taxpayer Relief Act of 2012. It revived Qualified Charitable Distributions for two more years – for 2012 retroactively, and also for 2013. Modified rules are in place for 2012, since Congress did not renew the provision until 2013.
If you waited for Congress to pass this legislation, but ended up taking your 2012 Required Minimum Distribution in December to avoid the 50% penalty on a missed RMD, all is not lost. One of the “special rules” allows a distribution made to an IRA owner in December to be treated as a QCD when all or part of the distribution is transferred “in cash” to a qualifying charity in January 2013.
You only have until January 31, 2013 to complete a QCD contribution for 2012!