<strong>By Deborah Miller, JD<\/strong>\r\n\r\n<strong>Senior Director of Planned Giving<\/strong>\r\n\r\n<strong>West Virginia University Foundation<\/strong>\r\n\r\nThis time of year is often tax-planning time for those who want to pay lower taxes overall. One tax-saving idea deals with gifts to family and friends and another uses IRA funds.\r\n\r\nEach of us can make annual gifts of up to $14,000 per recipient to any number of individuals to reduce the future taxability of our estate and provide for family and friends now. That amount is excluded from gift taxes. In the coming years, the annual amount will be indexed for inflation.\r\n\r\nMarried couples can make a combined gift of up to $28,000 per recipient, even though only one owns the property, and the gift will escape this type of tax.\r\n\r\nThese gifts to family and friends can be in the form of cash or stocks, mutual funds or corporate bonds. When appreciated assets are transferred, the recipient will also receive the original owner\u2019s cost basis and holding period for future tax calculations.\r\n\r\nMany who have planned wisely for retirement by putting money into IRA accounts now find that the required annual distributions are funds they do not really need after all. However, they must withdraw a certain amount or face a 50 percent federal tax penalty.\r\n\r\nAn alternative to paying the federal and state income taxes is available. Federal law currently permits anyone age 70 \u00bd or older to make tax-free gifts from IRAs to their favorite charitable organizations during 2013.\r\n\r\nGifts up to $100,000 can be made by having the IRA manager transfer the funds directly to the nonprofit organization (private foundations, supporting organizations and donor advised accounts are excluded).\r\n\r\nWhile regular IRA distributions are subject to federal and state income taxes, the charitable amounts escape federal taxes and most states, including West Virginia, also exempt the gift from taxes.\r\n\r\nNo personal benefit from the transferred amount is permitted.\r\n\r\nAn IRA gift counts toward the required minimum distribution for the year and doesn\u2019t impact or lessen the deductibility of any other charitable gifts made in 2013.\r\n\r\nIf you do not have an IRA, it may be worthwhile to discuss rolling over other tax-deferred retirement account funds into a newly established IRA to make such charitable gifts with your financial adviser.\r\n\r\nYour hard-earned IRA funds can be a tax-free way to help your community and favorite nonprofits.\r\n\r\nThat\u2019s good planning.