If you’re looking for a tax-efficient way to support your community while managing your retirement accounts, an IRA charitable rollover to the Royal Oak Civic Foundation could be an excellent option. This giving strategy offers significant benefits for both donors and the city of Royal Oak.
What is an IRA Charitable Rollover?
An IRA charitable rollover, also known as a Qualified Charitable Distribution (QCD), allows individuals aged 70½ or older to donate up to $105,000 annually directly from their retirement accounts to eligible charities without incurring income tax on the distribution. This provision has been made permanent, offering a reliable way for seniors to support causes they care about while potentially reducing their tax burden.
Benefits for Donors
Tax Advantages
The primary benefit of an IRA charitable rollover is its tax efficiency. By making a direct transfer from your IRA to the Royal Oak Civic Foundation, the distribution is excluded from your adjusted gross income, potentially lowering your overall tax liability. You can satisfy your required minimum distribution (RMD) without increasing your taxable income. This strategy may help reduce the percentage of your Social Security benefits subject to taxation.
Simplicity
Unlike other charitable giving strategies, the IRA rollover doesn’t require you to itemize deductions to realize tax benefits. This is particularly advantageous given recent changes to tax laws that have reduced the number of taxpayers who itemize.
Local Community Impact
You can make a significant impact on your community during your lifetime, allowing you to see the results of your generosity firsthand.
Benefits for the City of Royal Oak
The Royal Oak Civic Foundation serves as a central hub for philanthropic giving in the city. As a 501(c)(3) organization, it’s eligible to receive IRA charitable rollover contributions. Your donation through this method can support various civic entities and community projects that receive little or no tax-based funding, including:
To speak with someone from the Royal Oak Civic Foundation about this opportunity, call our office at (248) 254-6490 or send a message through this page on the Royal Oak Civic Foundation website.
How to Make Your IRA Charitable Rollover
1. Confirm eligibility: Ensure you’re at least 70½ years old and have a traditional IRA.
2. Contact your IRA administrator: Request a direct transfer to the Royal Oak Civic Foundation. The funds must be transferred directly from the IRA to the foundation to qualify.
3. Specify the amount: You can donate up to $105,000 annually through this method.
4. Notify the foundation: While your IRA administrator will handle the transfer, it’s a good idea to inform the Royal Oak Civic Foundation of your incoming gift.
5. Keep records: Maintain documentation of the transfer for tax purposes.
Remember, the transfer must be completed by December 31st to count for the current tax year.
An IRA charitable rollover to the Royal Oak Civic Foundation offers a unique opportunity to support your local community while enjoying potential tax benefits. It’s a powerful tool for philanthropically-minded individuals looking to make a lasting impact on Royal Oak’s civic life. As the Royal Oak Civic Foundation cannot offer you financial or tax advice, consult with a financial advisor or tax professional to determine if this strategy aligns with your overall financial and charitable giving plans.
By leveraging this giving method, you can play a crucial role in enhancing Royal Oak’s health, safety, and cultural opportunities, ensuring that our city continues to thrive for generations to come.
Howard H. Collens is a founding member of Collens Estate Law. He focuses his law practice on contested and uncontested estate and trust administration, estate planning, and elder law.
Mr. Collens is a board member for Ageways Nonprofit Senior Services and the vice president of the Senior and Caregiver Resource Network. Collens serves as a council member of the State Bar of Michigan’s Elder Law and Disability Rights Section.
