It is all clear now. Retirees can make charitable donations from their individual retirement accounts anytime under the latest U.S. budget deal.

Congress made it possible to donate directly to non-profit causes from IRAs in 2006. But it has been a rollercoaster ever since because the qualified charitable distribution (QCD) would sunset every couple years, leaving donors uncertain whether the provision would be renewed.

But the QCD is now permanent, after the U.S. budget approved in December turned a smart tax and estate planning tool into a reliable one.

The provision allows IRA holders aged 70-1/2 and older to make direct donations of up to $100,000 annually without first taking taxable withdrawals from their accounts.

That means households can make larger contributions before hitting the maximum tax deduction and carryforward limits. The big benefit is keeping donations out of the adjusted gross income reported on clients' tax return.

Higher adjusted gross income could push clients into a higher marginal income tax bracket and increase taxes on Social Security benefit. This is computed using what Social Security calls "combined income" -- your adjusted gross income plus tax-exempt interest, plus half of your Social Security benefit.

When an individual's combined income exceeds $25,000 ($32,000 for joint filers), 50 percent of the excess amount is taxed as ordinary income. If an individual's combined income exceeds $34,000 ($44,000 for married couples), 85 percent of the excess amount is taxed as ordinary income.

Higher adjusted gross income also can also trigger the high income surcharges on Medicare Part B premiums for outpatient services. The surcharges on start at $85,000 in annual modified adjusted gross income for individual filers ($170,000 for joint filers).

This year, the extra monthly premium charges range from $66 up to $285 monthly for the highest-income seniors.

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