By Virginia “Ginya” Carnahan, APR.CPRC, Director of Marketing & Development, Dattoli Cancer Center & Brachytherapy Research Institute
All of a sudden the end of the year is looming. Yes, it is. Just check your calendar. Before you know it April 15 will be knocking on the door. Even more important, you just have a few weeks to make those “adjustments” to your financial status that can impact your 2016 tax burden.
Ugh – tax burden. Not a friendly term. And why would I, a staff person at a cancer center, be concerned about your tax burden?
I’ve just recently learned about an interesting (and legal) way that our not-for-profit Dattoli Cancer Foundation (or any other not-for-profit organization, for that matter) and your annual IRA required minimum distribution (RMD) can become friends. I am not a financial whiz-kid. All those terms and acronyms leave me confused. The only one I really understand is IRS, but here is something of interest that even I can understand!
Apparently there are plenty of retired folks who did a better job in planning for their future than I have done – and they have IRAs (Individual Retirement Accounts) sitting around “for their old age.” Because many of these people are happy and healthy, (maybe “wealthy,” too) and their mortgages and college tuition loans are paid off, they do not really need the Minimum Required Distributions from their IRAs. In fact, since they are required to take a distribution from the IRA every year, it becomes taxable income … adding to that nasty “tax burden.
Here is where the magic comes in. Under the current IRS Tax Code, individuals can donate some or all of that RMD to a legitimate not-for-profit organization and it automatically becomes a “Qualified Charitable Distribution,” (a QCD). As such, it is no longer considered taxable income, in essence becoming a tax deduction! If the transfer comes directly from the trustee of the IRA to the charity there is no recognition of it as income on your tax return.
Sounds like magic to me. Just wish I was in the situation to be able to do this. Maybe one day I will be.
If this win-win opportunity intrigues you, just talk to your financial advisor. If you don’t have one I can suggest Tom Cannizzaro, a Certified Financial Planner located in downtown Sarasota. You can reach him at 941-587-7810.
You don’t have to have an IRA to support not-for-profit organizations, by the way. You can simply write a check. Just do it before the end of the year in order to count it as a tax deduction for the 2016 Tax Year. There are hundreds of local and thousands of national and international organizations that operate on donated funds, all with a mission of service of some kind.
To make sure that your donation goes to a legitimate not-for-profit, look it up on a website such a www.guidestar.com. You will be able to research the history of the organization, its governing board, financial status, projects, etc.
Another way to support an organization is by donating stocks. This is a bit more complicated, but in essence you can get a tax deduction for the amount of the value of the stock on the day it is transferred. And if that is not enough, you will get a warm feeling just for helping out.
While we’re thinking about helping out, Thanksgiving is coming soon. How about making a special Thanksgiving donation the area food bank, or volunteering to serve the festive meal at the homeless shelter. Few things will make you feel as thankful and grateful than lending a hand to others.
Dattoli Cancer Center & Brachytherapy Research Institute
941/365-5599
1-877-DATTOLI | www.dattoli.com