Charitable-minded retirees who have reached age 70½ have another chance to do a good tax deed with benefits. Reason: The 2010 Tax Relief Act extends a tax break for “charitable rollovers.”
Strategy: Donate funds directly from your IRA. In other words, instead of taking a taxable withdrawal and contributing the difference, you can tap into IRA funds to provide the full amount to charity. There’s zero tax due on the distribution.
This tax break for charitable rollovers officially expired after 2009. (Previously, it was set to expire after 2008, before it was extended.) Now the new tax law retroactively reinstates the provision to Jan. 1, 2010, and extends it again through 2011. So you still have a “window of opportunity” to take advantage of a charitable rollover.
How it works: An individual age 70½ can exclude from tax “qualified charitable distributions” of up to $100,000 that would otherwise be taxable as IRA distributions....(register to read more)