Annandale Village is an award-winning nonprofit organization dedicated solely to providing progressive life assistance to adults with intellectual disabilities and traumatic brain injuries so that they can maximize their abilities and maintain their independence in the least restrictive environment.

Gifts via Retirement Funds

Millions of Americans have taken advantage of generous tax incentives provided by Congress to encourage saving for retirement years through contributions to Individual Retirement Accounts (IRAs), 401(k)s, and similar plans.

These options have traditionally featured income tax savings at the time contributions are made to such plans. The assets in the plans then build tax free over time for future enjoyment.

Amounts in these plans are typically not subject to income tax until they are actually withdrawn from the plan by the plan owner or surviving heirs.

You may find that your retirement plan can be an excellent additional “pocket” from which to make all or a portion of your charitable gifts each year.

If you are over the age of 59½, and can make withdrawals from your IRA or other retirement plan without triggering an “early withdrawal” penalty, you may wish to make withdrawals from retirement plans in amounts sufficient to fund all or a portion of your charitable gifts to Annandale Village.

Although you will be required to report the income on your tax return, you are then allowed a corresponding charitable deduction for your cash gifts up to 50% of your adjusted gross income (AGI).

If you are able to deduct the full amount of the gift/withdrawal, this can amount to a “wash” for tax purposes and ensure these funds will, in effect, never be subject to gift, income, or estate taxes.

You should seek assistance from your accountant or other advisor when determining the optimum amount to give from retirement plan accounts under federal and state tax laws.

E-Newsletter Sign-up