Still Time for IRA Transfers to Charity for 2012

While 2012 is over, the opportunity to favorably impact your tax bill for 2012 if you are 70¹/₂ or older and have an IRA. You can transfer up to $100,000 from your IRA directly to a public charity. The transfer is not included in your gross income, saving you taxes.

This tax break had expired at the end of 2011, but the American Taxpayer Relief Act extended it retroactively for 2012. It can also be used for 2013. Because of late enactment, the IRS has clarified relief rules that let you take advantage of the new law as long as you act before the end of January 2013.

• Option 1: You can make a qualified charitable distribution from your IRA directly to a public charity and treat it as having been made in 2012.
• Option 2: If you received a distribution from your IRA in December 2012, you can contribute some or all of it (up to $100,000) to a public charity and have it count as having been transferred directly in 2012.

 Source: IR-2013-6