Tax Information

Note: This is not tax, accounting or legal advice. Donors must consult their own advisors to determine whether, and how, to make a charitable gift.

American Taxpayer Relief Act of 2012

Congress recently passed The American Taxpayer Relief Act of 2012 on January 1, 2013. The passing of this legislation has created an opportunity to extend the IRA Charitable Rollover for 2012 and 2013.

What does this mean for you?

Donors age 70½ or older are once again eligible to transfer up to $100,000 from their IRA accounts directly to qualified charities without having to pay income taxes on that money.

With these special rules in effect, an individual can make qualified charitable contributions up to $100,000 each in 2013 anytime between February 1, 2013 and December 31, 2013 for the 2013 tax year. Even more, these distributions can count towards the IRA's RMD (required minimum distribution) and do not show up on the 1040 form as part of the taxpayer's gross income.

Estate Tax Exemptions are Retained

The gift and estate tax exemption was kept substantially the same ($5 million, $10 million for married couples) as under 2012 law, with the top bracket moving up modestly from 35% to 40%.

Individual Income Tax Rates Increase for High-Income Households

Individuals earning an adjusted gross income of more than $400,000 and married filing jointly earning more than $450,000 will be subject to a higher 39.6% top marginal rate.

Capital Gains Tax Rates Increase for High-Income Households

The capital gains and dividend tax rates for high-income households will increase to 20 percent. There will be no capital gains tax for taxpayers whose income falls in tax brackets below 25 percent. The capital gains tax rate will be 15 % for taxpayers whose income falls at or above the 25 percent tax bracket but below the new 39.6 % rate.

Itemized Deductions and Personal Exemptions are Limited

The new law caps itemized deductions and phases out the personal exemption for individuals earning $250,000 or more and for married couples earning $300,000 or more.

The Payroll Tax Cut Ends

The social security payroll tax goes back to 6.2% from 4.2% for all taxpayers and for high income taxpayers the .9% Medicare tax kicks in.

Gift Annuity Rates

For more information and current suggested gift annuity rates, please visit the American Council on Gift Annuities website, click here.