Charitable Contributions by IRA Owners

  1. Charitable Contributions by IRA Owners

    IRC Sec. 408(d)(8) enables individuals over age 70 1/2 to contribute distributions from their traditional or Roth IRA to a qualified public charity. This provision (1) is limited to $100,000 per individual per year; (2) is not available to distributions from employer-sponsored retirement plans, including SIMPLE IRAs and simplified employee pension (SEP) plans; and (3) is currently scheduled to expire at the end of 2013. While such distributions cannot be deducted, they are not included in the individual’s income, which helps the individual avoid (or at least minimize the effect of) certain AGI-sensitive limitations (such as taxable social security benefits or deductions allowed only to the extent they exceed a percentage of AGI). They also count in meeting the Code’s minimum required distribution rule. News Release IR-2013-98.

  2. 2014 Filing Season Will Open on January 31

    The IRS plans to open the 2014 filing season on 1/31/2014. The 16-day federal government closure meant the IRS had to delay the original opening date, which was scheduled to be 1/21/2014. The 2014 date is one day later than the 2013 filing season opening, which itself was delayed following tax law changes made by Congress in the American Taxpayer Relief Act. The IRS also noted that (1) many software companies are expected to begin accepting tax returns in January, and will hold those returns until the IRS systems open on 1/31/2014; and (2) it will not process any tax returns before 1/31/2014, so there will be no advantage to filing on paper before the opening date. News Release IR-2013-100.

  3. Charitable Contribution Reminders

    As year-end approaches, the IRS offers several reminders on the rules applicable to individuals and businesses making charitable contributions. In order to deduct a monetary donation of any amount, the taxpayer must have written communication from the charity, a bank statement, or a credit card statement. A taxpayer must receive written acknowledgment from the charity for donations of $250 or more. Additional reminders include: (1) contributions are deductible in the year made, including donations charged to a credit card before year end, (2) only contributions to eligible charities are deductible (the IRS has a searchable database on www.irs.gov ), (3) individuals must itemize deductions to claim a charitable contribution deduction, (4) deductions for cars, boats, or planes are generally limited to the gross proceeds from their sale, and (5) a completed Form 8283 must be filed with a return claiming total noncash contributions of more than $500. News Release IR-2013-98 .

  4. 2014 Standard Mileage Rates

    Beginning on 1/1/2014, the standard mileage rates for cars, vans, pickups, and panel trucks will be 56 cents per mile for business miles, 23.5 cents per mile for medical or moving purposes, and 14 cents per mile for charitable purposes. The business, medical, and moving expense rates will be down a half cent per mile from the 2013 rates, while the charitable rate is set by law and remains unchanged from last year’s rate.

  5. 2014 Withholding Tables

    The IRS published Notice 1036, which contains early release copies of the 2014 percentage method income tax withholding tables that will appear in Publication 15 (Circular E), Employer’s Tax Guide (For use in 2014) , which will be posted to www.irs.gov and available at IRS offices in December 2013. The social security tax rate will be 6.2% each for the employee and employer with a security wage limit of $117,000, while the Medicare tax rate will be 1.45% each for the employee and employer. In addition to withholding the Medicare tax, employers will have to withhold a 0.9% Additional Medicare Tax from wages paid to employees in excess of $200,000 during the 2014 calendar year, beginning with the pay period in which the $200,000 threshold is crossed and continuing each pay period until the end of the calendar year. There is no employer share of the Additional Medicare Tax—it is imposed only on the employee.

  6. E-file Results for 2013 Filing Season

    The IRS announced that more than 122 million tax returns were electronically filed (e-filed) during 2013. More than 45.2 million returns were prepared and e-filed by taxpayers from their home computer; up from 43.2 million a year ago, while e-filed returns from tax professionals increased slightly, totaling more than 77 million returns. During 2013, the IRS issued more than 109 million refunds worth almost $300 billion (average refund $2,744), with almost 77% of refund recipients choosing direct deposit (average deposit $2,925). Furthermore, www.irs.gov has been accessed more than 430 million times, up almost 24% compared to the same time last year. News Release IR-2013-94 .