Made a Donation After Hurricane Sandy?
Published on March 28, 2013Photo by Greg Foster via Flickr for Creative Commons
Now that a few months have gone by, and the Northeast continues to rebuild and recovery from the devastation left in Hurricane Sandy’s wake, there are a few things to keep in mind with the end of the tax season closing in. The IRS has provided some help for victims of the hurricane which may affect your current retirement plan(s).
First of all, the IRS has eased the rules a bit to allow company retirement plans to make loans and hardship distributions to Sandy victims (this rule does not apply to IRAs). They have also postponed certain tax-related deadlines, such as the 60-day rollover period, the correction of excess contributions, etc. These postponements apply to IRA and company retirement plans.
For those of you reading this that have not been victimized by Hurricane Sandy, there are some ways to use your IRA money to donate and make charitable contributions to those in need. Some of these avenues include the following:
- The IRS has agreed to expedite the review and approval process for new charities.
- However, keep in mind that existing organizations may be able to administer relief programs more efficiently, as they have existing funding and guidelines in place.
- The IRS offers helpful information in “Publication 3833, Disaster Relief: Providing Assistance through Charitable Organizations.”
- You may make a donation to a charitable organization with funds from your IRA.
- Since Qualified Charitable Distributions (QCDs) expired in 2011, and Congress has yet to renew them, any funds removed from the IRA must be taken as a distribution and will considered as such.
- Anyone who wishes to donate this way and under age 59 ½ will be subject to a 10% penalty by the IRS for distributing early. Consult your accountant or financial planner to see if you can claim a tax deduction.
To read more about ways to contribute to Sandy victims, please check out this article by TheSlottReport.com titled, “Charities, IRAs, and Hurricane Sandy.”Back to Blog