If you’re interested in donating to Our Companions through the Charitable IRA Rollover this year, simply provide your IRA administrator with our full name, Our Companions Animal Rescue, and our tax ID number: 41-2047734.

If you have any questions or you would like to learn more about gift planning at Our Companions, please contact us at 860.242.9999 ext. 301 or SusanL@OurCompanions.org….(read more)

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Charitable Rollover IRA: A Way to Support Your Favorite Charities

As you plan for your retirement, have you ever considered how you can continue to support your favorite charities? One option to consider is a Charitable Rollover IRA.

What is a Charitable Rollover IRA?

A Charitable Rollover IRA, also known as a Qualified Charitable Distribution (QCD), is a tax-efficient way to donate money to a qualified charitable organization. It allows individuals who are age 70½ or older to transfer up to $100,000 per year directly from their IRA to a charity of their choice without having to pay taxes on the distribution.

How does it work?

Instead of taking Required Minimum Distributions (RMDs) from their IRA and paying taxes on the funds, individuals can choose to make a QCD to a qualified charity. The distribution counts towards their RMD, and since the funds are transferred directly from the IRA custodian to the charity, they are not included in the individual’s taxable income.

There are a few guidelines to follow when making a QCD:

– The individual must be age 70 ½ or older at the time of transfer.
– The charitable organization must be a qualified public charity or private operating foundation.
– The distribution must come directly from the IRA custodian to the charity.
– The maximum amount per year is $100,000 per person.

What are the benefits?

There are several benefits to making a Charitable Rollover IRA:

– Tax savings: Since the distribution is not included in the individual’s taxable income, they do not have to pay income taxes on the distribution.
– Reduce taxable income: For individuals who do not need the full amount of their RMD for living expenses, a QCD can help reduce their taxable income.
– Support favorite charities: Individuals can support the causes they care about while also benefiting from the tax advantages of a QCD.
– Simplify charitable giving: A Charitable Rollover IRA can simplify the donation process and eliminate the need for individuals to itemize deductions on their tax returns.

Important things to consider

While a Charitable Rollover IRA can be a great way to support charities while reducing taxes, there are a few important things to consider:

– The distribution cannot be made to a donor-advised fund, private foundation, or supporting organization.
– The QCD is limited to $100,000 per person per year and cannot be made from a Simplified Employee Pension (SEP) or a Simple IRA.
– While the distribution is not included in taxable income, it also cannot be claimed as a charitable contribution deduction on the individual’s tax return.

In conclusion, a Charitable Rollover IRA can be a valuable tool for individuals who are age 70 ½ or older and want to support their favorite charities. By making a direct transfer from their IRA to a qualified charity, they can reduce their taxable income and simplify their charitable giving.