Looking for ways to minimize any income tax you may owe for 2013? Think charities. If you itemize deductions you can take a charitable deduction against your 2013 income for contributions made to qualified charitable organizations. The deduction is not a dollar for dollar one but it can be substantial. As long as it’s acceptable to the charitable organization, any type of asset can be contributed, be it cash, marketable securities, real estate, etc.
In addition, if you are 70½ or older you can have a contribution made directly from your IRA (other than an ongoing SEP or Simple IRA) to a qualified charitable organization. The contribution can be up to $100,000. It will be allocated against your required minimum distribution amount, yet it won’t be includible as income on your income tax return. Likewise, it will not be subject to a charitable deduction against income since the distribution from your IRA is not includible in your income. Note, however, that the contribution has to be made directly from your IRA. Therefore, you’ll want to check with your IRA provider to determine what rules they may have in place regarding this technique.
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