If you are 70 1/2 or over, you can rollover up to $100,000 of your IRA Required Minimum Distribution into a gift that can support your favorite cause without dipping into your wallet.

It’s the time of year many of us conduct our charitable giving. There are several good causes and great organizations in our community doing important work.

Sometimes, though, we have more causes we want to support than we have income to do so. However, there is a way of giving you may have overlooked.

If you are 70 ½ or older and have an Individual Retirement Account (IRA), rather than making a year-end gift from your income, give money you already have set aside by using your IRA. You can direct your IRA administrator to transfer money directly from your account to your favorite charity. This will allow you to give from a pre-tax asset and the distribution is excluded from your taxable income.

Any amount you transfer will count toward your Required Minimum Distribution (RMD). In fact, you can transfer up to $100,000 (per person) to a qualified charity this year.

IRA rules mandate that you take a RMD, and you will face penalties if you don’t. Your age and account value determine the amount you must withdraw. If you take a distribution from your IRA, you may pay more in taxes.

The new Tax Cuts and Jobs Act will likely impact you if you have previously relied on itemizing deductions to reduce your tax bill. Under the new law, the standard deduction has nearly doubled to $12,000 for single filers and $24,000 for married couples.

There are also new limits to deductions for local and state property taxes with a maximum total deduction of $10,000. New mortgage and home equity debt limitations are in effect now too.

You are allowed to make an IRA charitable rollover and use it to meet your RMD without paying taxes on it. If you were planning to make a charitable contribution anyway, it makes sense to make the contribution with money you don’t have to pay taxes on, rather than paying the taxes before making the contribution!

It’s important to make sure the IRA distribution passes directly to the qualified charity and not into your hands first. If the distribution comes to you first and then you give it to charity, you will have to count the distribution as income and pay income tax on it.

It’s easy to make a gift from your IRA. Contact your IRA administrator, who can provide the forms you need to complete with the gift amount and charity noted on them. You’ll need the name and address of the qualified charity or nonprofit organization because the check will be sent directly to it.

You will pay no income tax on the amount you transfer. However, because you are not claiming the transferred amount as income, you will not receive an income tax deduction for your gift. Remember though, the amount needed to receive a charitable tax deduction has increased.

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