The Pension Protection Act of 2006 allows for people aged 70 ½ to make a donation to a charity directly from their IRA. The distributions are tax-free and will avoid penalties for early withdrawl. Donors are allowed to donate up to $100,000 per year through their 401k.
This may be of great benefit if you are:
- Age 70 ½ or older
- Are required to take a distribution from your IRA
- Do not itemize deductions on your taxes
- Charitable gifts already equal 50% of your adjusted gross income
- Are subject to the 2% rule that reduces your itemized deductions