First, everyone’s situation is different. It’s important you talk to your accountant or tax advisor about your specific situation. With that, if you are age 70 ½, have a traditional IRA, and make gifts to charity, using your IRA may be a smart way to make gifts to the charities you love.
When you’re ready to make a gift, contact your IRA administrator to request a qualified charitable distribution (QCD) be made directly to your charity. The benefit of a QCD is you do not report the distributed amount as income while your charity receives the full amount to use toward its mission. If you’re age 72 or older, you have the added benefit of counting the QCD toward your required minimum distribution (RMD).
You can make as many QCDs as you want in a year, as long as the cumulative amount doesn’t exceed $100,000. Because you do not recognize the distribution as income, you cannot use the gift as a tax deduction. Which, if you claim the standard deduction, you would not be able to do anyway.
If you would like to learn more or wonder if your charities qualify, I’m here to help.