On December 18, 2015, President Obama signed the Protecting Americans from Tax Hikes (PATH) legislation, a $1.1 trillion act that extended or made permanent more than 50 tax credits and incentives affecting businesses as well as individuals.
One important provision allows an individual taxpayer aged 70½ and older to donate up to $100,000 from an individual retirement account (IRA) directly to a charitable organization. While the donation cannot be claimed as a charitable deduction, it avoids federal income tax—allowing the full amount to go toward charitable purposes.
PATH has now made this incentive permanent, allowing individuals and charities much more opportunity to plan ahead. This new bill offers powerful leverage for those looking to establish a lasting legacy in their community.
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