IRA $100,000 Charitable Withdrawal through 12/31/14

By:  Julie Frey.

If you are chairtably inclined and wish to use some of your IRA to fund your charitable donations, the Senate has just passed an extension of some “tax extenders” that were in place in 2013.  It is anticipated that President Obama will sign the bill in the next few days.  What does this mean for you?  It means that if you are 70 1/2 years of age or older you can take up to $100,000 in tax-free distributions from your IRA in 2014 provided that the funds withdrawn are given to an eligible public charity.  While one cannot also take a deduction for that contribution, the money won’t count as income.  Once President Obama signs the bill into law, you will only have a few weeks to act, so contact your advisors now to alert them to your intention to make the withdraw and charitable contribution.  The ability to do this ends on December 31, 2014. read more

Inherited IRAs Subject to Bankruptcy Creditors

By: Jason Palmisano

In 2001, Heidi Heffron-Clark of Wisconsin inherited an individual retirement account (IRA) valued just over $450,000 from her mother. In 2010, Heidi and her husband filed for bankruptcy. The Clarks sought to exclude the inherited IRA from their bankruptcy estate which would block their creditors from obtaining any proceeds from the inherited IRA.  At the time of the bankruptcy filing, the inherited IRA was worth approximately $300,000.  In a unanimous decision, the Supreme Court of the United States held the inherited IRA was included in their bankruptcy estate and was not protected from the Clark”s bankruptcy creditors.  The Supreme Court reasoned an inherited IRA is distinct from an individual’s own IRA, and thus not exempt from creditors in bankruptcy, for 3 reasons: read more

Give to your charity of choice or the IRS

By:  Julia Frey.  The income tax bill for 2013 may be a rude awakening for many people. Even if you had the same amount of income in 2013 as you did in 2012, your tax bill WILL increase and may increase by a significant amount; some pundits opine a minimum of 7%. Remember, that income taxes can go up to 39.6% and capital gains taxes have increased for high income wage earners. There may also be an additional 3.8% Medicare tax on investment income. Itemized deductions have also been reduced for high income earners. read more