As you review your options for charitable giving this year, especially any larger donations, there is a smarter giving method to consider by using your IRA.
Donors who are the age of 70 ½ or older are encouraged to think about where you are giving from. Meaning, are you writing charitable donations from your checkbook? If yes, you may want to consider giving from your IRA instead.
As someone who has utilized the tax savings and ease of giving from an IRA, Community Foundation Board Member Don Fletcher said, “On a personal level, my wife Bonnie and I have worked hard, saved, and invested over the years, and now we have the opportunity to share with a community that has been very good to our family.”
The fancy term for giving from your IRA is “qualified charitable distributions” or QCDs but what you need to know are the following key items:
- If you are fortunate enough that you do not need all of the funds from your IRA, it is good to have a plan for those funds- including charitable giving.
- Meet your RMD: Charitable giving from your IRA can be done to meet your required minimum distribution.
- A win for you and a win for your favorite cause(s).
- I Don’t Itemize: If you no longer itemize your taxes, charitable giving from your IRA may allow you to take a higher standard deduction, while reducing your taxable income.
For many of us, being generous with our money is one of life’s great joys… and it turns out that being generous with your IRA can be both personally satisfying and provide tax benefits as well.
So if you are 70 ½ or older and already give to charity, or want to start giving to charity… look into giving from your IRA (not from your checkbook).
If you would like to further explore your charitable giving options, please reach out to Jackie Hanton at [email protected] or call 810-984-4761 to confidentially discuss your best options.
This information is not a substitute for expert legal, tax, or other professional advice, and we strongly encourage donors to work with your professional advisor to determine the impact of making a QCD on your particular situations.