401k to charity

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Subject Author Date 401k to charity Piet de Arcilla 10-05-2009  Re: 401k to charity Arthur Kamlet 10-05-2009  Re: 401k to charity Phil Marti 10-06-2009  Re: 401k to charity Alan 10-05-2009
Posted by Piet de Arcilla on October 5, 2009, 12:50 pm Please log in for more thread options If I withdraw from my 401k, I have to pay taxes and a penalty on top of that. If I make a charitable donation with all of the money I withdraw, do I avoid paying the tax and penalty? -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Arthur Kamlet on October 5, 2009, 1:31 pm Please log in for more thread options >If I withdraw from my 401k, I have to pay taxes and a penalty on top >of that. If I make a charitable donation with all of the money I >withdraw, do I avoid paying the tax and penalty? You might be thinking of the rule that allows up to $100,000 lifetime to be transferred from your IRA to a qualified charity, and not having to declare that IRA distribution as taxable. That expires 12/31/09. But there is not a similar rule for a 401k. If you are able to first transfer the 401k into an IRA, then you could proceed as above. But if you're still working for the company where you have your 401k you may not be able to make a transfer to an IRA. -- ArtKamlet at a o l dot c o m Columbus OH K2PZH -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Phil Marti on October 6, 2009, 2:25 am Please log in for more thread options On Oct 5, 12:31 pm, kam...@panix.com (Arthur Kamlet) wrote: > You might be thinking of the rule that allows up to $100,000 lifetime to > be transferred from your IRA to a qualified charity, and not having > to declare that IRA distribution as taxable. That expires 12/31/09. > > But there is not a similar rule for a 401k.  If you are able to first > transfer the 401k into an IRA, then you could proceed as above.  But > if you're still working for the company where you have your 401k you > may not be able to make a transfer to an IRA. OP indicated concern about the premature distribution penalty, which leads me to believe he's not 70 1/2, and the QCD provision wouldn't apply to him. Phil Marti Clarksburg, MD -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Posted by Alan on October 5, 2009, 8:36 pm Please log in for more thread options Piet de Arcilla wrote: > If I withdraw from my 401k, I have to pay taxes and a penalty on top > of that. If I make a charitable donation with all of the money I > withdraw, do I avoid paying the tax and penalty? > You can't avoid the early withdrawal penalty because it gets added to your calculated taxes in a section on the 1040 called Other Taxes. As to whether your additional charitable contributions deduction offsets the tax on the additional pension income depends upon whether the amount of additional charitable contributions all flow to the bottom line of Schedule A. There are limits on the amount of charitable contributions that can be deducted. In addition, itemized deductions start to phase out when your income gets too high. -- << ------------------------------------------------------- >> << The foregoing was not intended or written to be used, >> << nor can it used, for the purpose of avoiding penalties >> << that may be imposed upon the taxpayer. >> << >> << The Charter and the Guidelines for submitting posts >> << to this newsgroup as well as our anti-spamming policy >> << are at www.asktax.org. >> << Copyright (2007) - All rights reserved. >> << ------------------------------------------------------- >> Similar Threads Posted Solo 401K (aka Individual 401K) same as Super-Simplified 401K? 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