Tax Law Changes in 2009

There is a requirement that, at age 70 1/2, people with an IRA must make a minimum distribution from their IRA, even if they don't need the income. This can impact their tax bracket and result in paying tax on a distribution (income) they may not need.

But, there is a new law impacting people who have an IRA and have reached age 70 1/2. the new law permits individuals to make up to a $100,000.00 donation to a charity WITHOUT PAYING TAX on that money. For example, if you find yourself in this position, you could choose to make up to a $100,000 gift to The Rotary Foundation of Rotary International. This would meet the required minimum distribution without boosting your adjusted gross income and thus incurring extra income tax. And, since this donation gets tax benefits without being claimed as a deduction (you can't get tax credit in multiple ways), it makes good sense to use it before year end. (This provision disappears in 2010)- - This is for the 2008 and 2009 tax years only. - - It can only be done by a third party and the owner of the IRA cannot take possession of the distribution. - - It must be transferred from the IRA directly to the charity.

For more information contact Lucinda Kasperson, Permanent Fund Chair, District 6440 (rotarylucinda@aol.com or 847-272-7275).