If you have turned 70 1/2 and you have an IRA retirement savings, you have a Required Minimum Distribution (RMD) that you must withdraw annually to avoid a steep penalty. This will also apply to younger people who have inherited an IRA and have a RMD. When you withdraw this money you will pay income tax on the amount, as this withdraw is added to your Gross Adjusted Income.
The new tax law has increased the Standard Deduction, so more people will choose not to itemize their taxes. Charitable giving, for some, is one of the deductions that donors include when they itemize. But there are several ways to give to charity and have a tax savings other than by itemizing.
If you need to take a Required Minimum Distribution (RMD) from your IRA, or an Inherited IRA, you can donate the RMD directly from your Traditional, Rollover, SEP or Simple IRA to a 501c3 Charity.* When this withdraw is taken directly from your IRA and given to the qualified charity it bypasses you, and you are not taxed on the RMD. You can donate up to $100,000 of your RMD annually.
This is a great way to continue to give, reduce your taxable income, and benefit when using the standard deduction under the new tax law.
Some people think that the RMD needs to be withdrawn at the end of the year, but now you can take this withdraw at any time during the year. The only exception is on the first year after you turn 70 1/2 (or qualify to take an RMD), you need to make the withdraw before April 1.
Physicians for Social Responsibility Philadelphia / PA is a qualified 501c3 charitable organization. We appreciate your support and understanding that advocacy is key to prevention. For almost 40 years health care professionals, scientists and researchers have joined together to voice their concerns for public health through Physicians for Social Responsibility - Philadelphia / PA.
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