By Sr. Laura Goedken, OP
Many people have planned for their retirement with contributions to IRAs, 401(k)s and similar plans. When you make a contribution to your plan, you realize an income tax savings. This money is taxed when you withdraw it. Funds remaining at your death become part of your estate and are taxed for state and/or federal estate tax purposes.
At age 59 ½ you are able to withdraw from your retirement plan; this withdrawal is taxed but there is no early withdrawal tax. This withdrawal can be offset for tax purposes by making a donation to your parish, school, the Diocese of Davenport or the Catholic Foundation up to a maximum of 50 percent of your adjusted gross income.
For individuals over 70 ½ you can arrange tax-free gifts of up to $100,000 per year to a qualified charity such as your parish, school, the Diocese of Davenport or the Catholic Foundation. This provision is scheduled to expire at the end of 2013. Since 2006 this has been extended each year; you will need to wait and see for 2014. Check with your advisors if you have questions.
For more information on making donations, contact Sister Laura Goedken, OP, at the diocese, (563) 888-4252 or email her at Goedken@davenportdiocese.org
(Sr. Goedken is director of development for the Diocese of Davenport.)