USE Your IRA for Your Annual Gift and Your Estate Gift

Taxpayers must start taking required minimum distributions from many types of retirement accounts in the year they turn 70.5, whether or not they want or need them.

Objectives Met:

  • Reduces my current income tax

  • Supports the Erie Philharmonic

  • I enjoy seeing the impact of my charitable gift now

  • Ensures lasting support for my favorite causes

  • Reduces potential impact of federal estate and gift tax

  • Reduces tax impact of required minimum distributions

Gift Spotlight:

Betty, aged 80, must take a required minimum distribution of $25,000 this year from her IRA.  She wants to use the funds to make her annual contribution to support the Erie Philharmonic matching gift program for Emanuel Ax.  She usually does not itemize her taxes and thus has the funds transferred directly to us, using the IRA charitable rollover to make her annual contribution.  Betty escapes both federal and state tax.  Betty also decides to make us the beneficiary of her IRA in her estate plan and leave other assets to her loved ones.  She chooses this gift strategy because her loved ones would have to pay income tax on her IRA proceeds.

If the largest asset in your estate is your retirement plan, such as a 401(k), IRA, or Keogh, you may be surprised to learn that the IRS will impose income tax on the remaining balance in the account if you designate it to any other beneficiary, including your spouse.

This tax is in addition to the estate tax that may be imposed on the account. For estates fully subject to the estate tax, the result can be that up to 60 percentof the value of your retirement plan will be consumed in taxes before your child, relative, or friend receives it.

There is a sensible charitable alternative

Name the Erie Philharmonic as the beneficiary of your retirement plan, then use other assets not subject to income tax to make gifts to your heirs. The Philharmonic, as a qualified non-profit, won't pay income tax on our distribution and your heirs will receive their share of your estate without the burden of extra taxes.

Gift Impact:

  • Your gift will have an immediate, tangible effect on the Philharmonic.  Examples of this impact include:

  • Sponsor busing expenses for children to attend our annual Youth Concerts

  • Cover the travel fee or soloist fee for our guest artists

  • Cover the cost of musicians for one concert, one series, or the entire season

  • Sponsor special events like our Casablanca concert or Emanuel Ax Residency

  • Cover the rental fee for the Warner Theatre

To take advantage of this opportunity, please contact Executive Director Steve Weiser at 814.455-1375, ext. 120 or sweiser@eriephil.org