Age 70 ½ and older and no longer an itemizer? Find out how the IRA Rollover can help you save taxes.

Looking for ways to save on taxes and support Bar Ilan University?

For most Americans entering retirement years, IRAs (Individual Retirement Accounts) comprise over 60% of one’s financial assets (as opposed to your home or other real estate investments). These represent saving via various retirement plans over your career and/or just good planning for your retirement.

But, all IRA funds are fully taxed when withdrawn by you or your heirs. Funds contributed to qualified retirement accounts like regular IRAs and 401k’s are all “pre-tax.” While the growth is not taxed as it accumulates, the government will eventually tax these funds when withdrawn at the highest-level tax of ordinary income. That is, unless you decide to contribute IRA funds to AFBIU via the Charitable IRA Rollover giving or designate a charitable institution as a beneficiary.

And, once you reach age 72, you are required to withdraw a minimum amount each year based on your age from your IRA – referred to Required Minimum Distributions (RMDs). RMDs are fully taxable like any regular IRA or retirement account withdrawal – whether you need these funds or not. That is, unless you decide to send your RMD to AFBIU under the Charitable IRA Rollover provision. IRA Rollover gifts count towards your annual RMD, avoiding unnecessary taxes.

And, as you enter retirement years and may have reduced your expenses – you may find yourself in 2022 no longer itemizing on your tax return (we recommend consulting with your accountant early this year to see if this applies to your situation). If this is the case, you may no longer receive any tax benefits from your charitable giving. That is, unless you utilize the Charitable IRA Rollover provision for charitable giving – you will not be taxed on gifts that go directly from your IRA (it only applies to IRA accounts) to AFBIU as long as your age 70 ½ or older.

Lastly, if you are considering a legacy gift via your estate to AFBIU, you may want also consider naming AFBIU as a beneficiary of your IRA and leaving other assets to family. Since IRA funds are “pre-tax”, the government taxes them even to your beneficiaries when withdrawn. That is, unless you decide to designate charitable institution to receive some or all of a retirement account.

Charitable IRA Rollover Facts:

• You must be age 70 ½
• You can only gift up to $100,000 via this provision
• Only applied to IRAs, not other retirement accounts
• The gift must come directly from your IRA plan to AFBIU (ask your IRA custodian for guidance in making a gift)
• IRA gifts may not be used for tickets for donor event

To learn more about IRA Rollovers to benefit Bar-Ilan University, please phone Jonathan Gudema at 917.817.7989 or email Jonathan Gudema <jonathan@plannedgivingadvisors.com>

Notice: Consult your legal and tax advisors before making any material decisions based on this information.