Avoid taxes by giving directly from your IRA
Patricia: My financial advisor told me that because I am turning 73 this year, I have to begin taking a required minimum distribution (RMD) from my IRA. He also told me that because my income is increasing, my tax rate would too.
I wanted to keep making donations and reduce my taxes. I learned I could reduce my income and my taxes by transferring money directly from my IRA to charity.
If you're age 70½ and older, you can donate up to $100,000 each year directly from your IRA to qualified charities, like Oakland Symphony. If you are age 73 and older, the donations you make from your IRA can qualify for all or part of your required minimum distribution each year. Making a donation directly from my IRA lowered my adjusted gross income (AGI) and helped me offset other taxes, like Social Security. I wanted to keep making donations and reduce my taxes. I learned I could reduce my income and my taxes by transferring money directly from my IRA to charity.
I called my IRA custodian and requested a transfer of $10,000 directly from my IRA to Oakland Symphony. I avoided paying $2,400 in income taxes which allowed me to make a larger gift to Oakland Symphony.
I'm thrilled that a gift from my IRA reduces my income taxes this year and helps my favorite charity.
Is giving from your IRA right for you?
Have you calculated what your IRA required minimum distribution (RMD) will be this year and how it will affect your taxes? If you have questions about how you can benefit by making a gift from your IRA, please contact us.