If you are [...]]]> The compromise tax package just passed by Congress brings back for 2010 and 2011 the ability to donate tax-free from an individual retirement account. And, reflecting the end-of-year nature of the Congressional action, the 2010 donation can be made as late as January 31, 2011. (See section 725 of H.R. 4853).

If you are 70½ or older you can donate from your IRA directly to the qualified organization of your choice – tax-free! The tax package rule applies to the 2010 and 2011 tax years, and allows you to give up to $100,000 each year. You could call this rule the “Grin and Give Rule.”

Normally, when you take money out of your IRA, that money is taxable income to you. That’s fine, you say, you’ll just turn around and spend the money on your mortgage or give it to a charity — and get an offsetting deduction. But you might not get all or part of that deduction if, for example, you use the standard deduction or you itemize and your deductions get caught up in the phase-out rules.

Under the Grin and Give Rule, the money taken from the IRA is not taxable income to you. And you don’t have to worry about whether you use the standard deduction, itemize or face other deduction limits. Actually, if you were going to make a charitable deduction anyway, using the Grin and Give Rule could help you protect your other itemized deductions, and even save taxes on your social security. And, of course, the charity doesn’t have to pay any tax either.

Cautions: Don’t give away money you may need. The gift must be made directly from your IRA trustee to the charity. Be sure to obtain a written receipt from the charity to substantiate your donation. The Rule applies to many charities, but not all. At this moment, this is a Federal income tax law; check whether the your state’s income tax laws have been conformed to include the extension. Consult your tax advisor.

Of course, a donation needs to be made to a qualified organization. Only those who itemize their deductions [...]]]> Your cash donations in early 2010 to help in the Haiti earthquake relief efforts could actually get you a 2009 income tax deduction! This includes contributions made by text message, check, credit card or debit card.

Of course, a donation needs to be made to a qualified organization. Only those who itemize their deductions on Schedule A get to take charitable deductions. The donation must be made during the period January 12 through February 28.

For the details, read the IRS article on Haiti donations.

Read the article.

In addition to being easy, donating to charity can be tax-smart – reducing your income, [...]]]> Here’s what you’ve been waiting for. A list of nine ways to give to your favorite charities, and they range from easiest to easy. If it’s difficult, challenging, complex or even sweat-inducing, it doesn’t make the list.

In addition to being easy, donating to charity can be tax-smart – reducing your income, capital gains, and estate and gift tax liabilities.

Download / print out the PDF.

The List:

[2] A donor-advised fund is an investment account administered by a charity or investment organization. A donor opens a donor-advised fund by making a contribution, and receives an immediate income tax deduction. The donor no longer controls the funds contributed, but can recommend grants to charities of their choice.

[3] By donating an appreciated asset, you avoid any capital gains taxes you would pay when you sell it during your lifetime – a tax-smart alternative to selling the asset and donating cash.

[4] Normally, IRA withdrawals are taxable income. Until December 31, 2009, however, you can withdraw and donate tax-free from your IRA, if you are at least age 70 ½. The check should be paid directly from the IRA account to the charity.

[5] Even though it’s called “estate giving” (because the gift happens when you die), you have to act during your lifetime to use these approaches.

[6] This approach also avoids probate. Probate does not apply to lifetime giving.

Come January 1, this rule is gone.

Read the details.

Read The Chronicle of Philanthropy report.

The Bloomberg.com article.

What’s a giving circle? Basically, a group of people getting together to focus and pool their giving. Kind of like an investment club, but with philanthropy as the investment.

The Forum of Regional [...]]]> The U.S. is the philanthropy capital of the world.  And giving circles are helping make sure we never lose that title.

What’s a giving circle? Basically, a group of people getting together to focus and pool their giving. Kind of like an investment club, but with philanthropy as the investment.

The Forum of Regional Associations of Grantmakers has created a terrific online knowledge center about giving circles, including information on how to create and operate a circle; sample documents; true life stories; a list of existing circles across the U.S.; and much, much more. Bravo!

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