Saturday, July 16, 2022

Here’s a tax-smart charitable giving strategy using money from your IRA

Estate planningThere are a variety of ways to contribute to charity, and while experts recognize that most people don’t make charitable donations for the tax breaks, there are many financial benefits involved. Retirees who wish to make philanthropic contributions have a special tax break at their disposal if they choose to transfer funds from individual retirement accounts known as qualified charitable distributions, or QCDs.

QCDs are direct gifts from an IRA. Individuals who are 70 years and six months of age or older may donate up to $100,000 per year. Doing so will not be considered a charitable deduction, but there are other significant tax benefits. The primary benefit is that the transfer does not count as taxable income. When transfers are made at age 72 or older, it may satisfy required minimum distributions and accomplish other tax goals.

For more information:

See Kate Dore “Here’s a tax-smart charitable giving strategy using money from your IRA,” CNBC, July 8, 2022.

Special thanks to David S. Luber (Florida Probate Attorney) for bringing this article to my attention.

Estate Planning – Generally | Permalink


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