Tax Wise Giving for 2011

Are you 70.5 years old or older and own an IRA? Here is a tax wise giving option that could save you hundreds of dollar on your 2011 income taxes.

As part of the tax law passed in late December which extends the Bush-era tax cuts, Congress has resurrected a provision that allows people over 70.5 years of age to make tax-free distributions from their traditional or Roth Individual Retirement Accounts (IRAs) for charitable purposes:

• Qualified charitable distributions from your IRA are not counted as part of your taxable income.
• Avoid being taxed on your required minimum distribution even if you do not itemize deductions.
• Each IRA owner can give up to $100,000 in 2011.

This may be the best way to support WELS ministry— your home congregation, our synodical mission efforts and the training of our pastors and teachers—in 2011. Consider the example of someone 71 years old who is taxed at a rate of 20 percent and who doesn’t itemize. For this person a $5,000 gift by way of a qualified charitable distribution from a traditional IRA will mean $1,000 in income tax savings.

A qualified charitable distribution requires a direct transfer from an IRA to a qualified public charity. We suggest that you consult your tax and/or financial advisor for any applicable tax/financial consequences. If this unique opportunity to support gospel ministry is of interest to you, WELS Ministry of Christian Giving can assist you with the process. Contact your local Christian giving counselor by calling 800-827-5482.