Hurry to get this potential IRA-related tax break

Don’t miss out on the chance to benefit The National Judicial College this year and reduce your 2016 tax burden by making an IRA Charitable Transfer, which became a permanent part of federal tax code in December 2015.

Here’s how to do it:

IRA owners who are at least 70 1/2 may donate up to $100,000 of account assets per year directly to The National Judicial College, which is a 501(c)(3) nonprofit (tax ID# 94-2427596).

These donations count as part of the IRA owner’s Required Minimum Distribution and directly offset the amount that is required to be withdrawn as income.

Here is an example taken from The Trust Company:

If your Required Minimum Distribution is $50,000 and you donate $30,000 from your IRA assets, only the remainder of $20,000 must be withdrawn and is taxable. A possible effect of this could be that your income is reduced such that it may help you remain in a lower tax bracket or avoid taxes on Social Security benefits.

Hurry. To qualify for the 2016 tax year, you must donate to the NJC by Dec. 31, 2016. The donation must be a transfer directly from your IRA to the NJC.

Before filing your 2016 tax return, be sure to have proof of the IRA transfer, according to IRS Publication 526.

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