Congressional action sets in motion package to help smooth IRA rollovers

Important news for supporters of Notre Dame Preparatory School and Marist Academy aged 70-1/2 or older.

CONGRESS SET TO PASS POPULAR IRA ROLLOVER PROVISION ALLOWING RETIREMENT ASSETS TO BE DONATED TAX-FREE TO 501C3 CHARITABLE ORGANIZATIONS
 
In the early morning hours yesterday, with the Christmas recess looming, the U.S. House of Representatives carved together a package of “tax extenders,” which, among other things, will permanently allow taxpayers to rollover funds from their IRA and retirement assets to a charitable organization and avoid the withdrawal penalties, while also receiving the allowable charitable deduction for the current tax year.  

The full House vote on the package is expected today or Friday and all indications are that it will pass muster there as well as in the Senate with an all-but-assured signing by the president to follow.
 
An individual may withdraw funds from an IRA as early as age 59-1/2, but must do so at age 70-1/2. The funds withdrawn are subject to income tax under most circumstances. This provision in the tax law allows up to $100,000 to be donated to a charitable organization directly from the IRA, without the incursion of income taxes. To qualify, the donation must be made from a traditional or Roth IRA directly to a public charity, such as NDPMA.  

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"Whether or not one itemizes deductions, the IRA rollover is a great way to make a major contribution to NDPMA without triggering income taxes on the mandatory withdrawal when age 70-1/2 or older," said Robynn James. "For example, tax filers who have paid off their home mortgages and no longer itemize returns can avoid a tax burden that would otherwise be triggered by the income tax on a mandatory IRA withdrawal. It is a great way to make a significant gift to NDPMA during your lifetime while avoiding negative tax consequences. " 

This provision had been allowed to expire in 2008, and required renewal by Congress each year. After renewing this popular tax benefit for charitable giving five times, a bipartisan group of representatives has joined forces to remove the expiration date beginning with this year’s extension, meaning that IRA rollovers are now an option for charitable donations up to $100,000 every year without requiring an annual extension.  

If one is 70-1/2 or older, please consult a tax advisor to see if an IRA rollover would be a good idea. For more information on this and other ways to make a gift to NDPMA using planned and estate gifts, such as charitable gift annuities, remainder trusts and bequests, please call Gregory Simon, Notre Dame’s Director of Advancement, at (248) 373-2171, ext. 5, or e-mail at gsimon@ndpma.org.

Comments or questions? mkelly@ndpma.org.

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About Notre Dame Preparatory School and Marist Academy

Notre Dame Preparatory School and Marist Academy is a private, Catholic, independent, coeducational day school located in Oakland County. The school's upper division enrolls students in grades nine through twelve and has been named one of the nation's best 50 Catholic high schools (Acton Institute) four times since 2005. Notre Dame's middle and lower divisions enroll students in jr. kindergarten through grade eight. All three divisions are International Baccalaureate "World Schools." The Marist Fathers and Brothers sponsor NDPMA's Catholic identity and manages its educational program. Notre Dame is accredited by the Independent Schools Association of the Central States and the North Central Association Commission on Accreditation and School Improvement. For more on Notre Dame Preparatory School and Marist Academy, visit the school's home page at www.ndpma.org.



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