Donation from IRAs can be TAX FREE

[Bekeart]

Seniors you can donate from your IRA tax free.
This is in addition to the increased Standard Deduction.
The magic words are - Qualified Charitable Distribution (QCD).



Short details:
1) - Select the charity - The charity must be a 501(c)(3) organization.
2) - Contact your funds administrator.
3) - Give instructions on how much and how you want the funds to come out of your account. ( e.g. Sell $200 of Algamated Buggy Whip.)
4) - Give the name of the charity to receive the funds.
5) - Make sure that they understand that this is to be a QCD.
6) - A check will be written with the Charity as Payee.)

IF the check was written Payable to YOU it would be taxed.

In my case the Brokerage will mail the check to me, and I will then forward it to the charity.

I will be using part of my Required Minimum Distribution for tax free donations.

Wall Street Journal has an article:
The Secret Way Seniors Can Keep Deducting Gifts to Charity - WSJ

I am not a tax preparer or tax advisor - I read the article and googled for more information.

This is a good time to plan your tax avoidance strategy for 2019.

Bekeart

 

[Cardboard_killer]

Just a reminder that while you are not taxed on the charitable contribution, you still have to give the money away. Which is laudable, but just remember that you are only saving the taxes on money you're giving away directly from your retirement account to the charity.

 

[Bekeart]

A penny saved, is a penny earned.

 

[DWalt]

I don't believe that a contribution to a charitable organization made directly from a conventional IRA can be claimed as a tax deduction. You just won't pay income tax on that part of the RMD. If you want to contribute from a Roth IRA, you can contribute any amount to any charity with no tax consequences as there is no RMD for a Roth IRA, nor is anything in it taxed upon withdrawal.

 

[Bekeart]

Clarification

I posted the original in the belief that some of us are seniors who choose to donate to charities of our choice.
With the increased Standard Deductions many persons will no longer be itemizing for their deductions.
The Qualified Charitable Distribution will save some on the donors tax

If you are over 70 1/2, have an IRA, and intend to donate to a
501(c)(3) qualified charity you can avoid paying taxes on your donation.

e.g If you withdraw $100 and then give the money to a charity, that $100 will be considered taxable income.

e.g If you do the $100 withdrawal as a Qualified Charitable Distribution, that $100 will NOT be considered taxable income.

Is the $100 still allowed as a charitable donation?
I am not a tax advisor. This question is above my pay grade.

There is an upper limit - This Qualified Charitable Distribution tax avoidance is limited to $100,000 of donations.
If you are donating over $100,000 you should already have a paid tax advisor.

Bekeat

 

[vytoland]

my charity begins at HOME.....

 

[Cardboard_killer]

Despite what below says, the IRS still gots to know.

1 Beware of practicing your righteousness before other people in order to be seen by them, for then you will have no reward from your Father who is in heaven.

2 Thus, when you give to the needy, sound no trumpet before you, as the hypocrites do in the synagogues and in the streets, that they may be praised by others. Truly, I say to you, they have received their reward.

3 But when you give to the needy, do not let your left hand know what your right hand is doing,

4 so that your giving may be in secret. And your Father who sees in secret will reward you.