WAYS TO GIVE: IRA QUALIFIED CHARITABLE DISTRIBUTIONS

Did you know that qualified individuals can donate to charities from their Individual Retirement Accounts (IRAs)? This type of contribution is becoming more popular each season, so we have answered a few common questions about these donations.

WHO CAN DO THIS? Individuals age 70.5 or older who must take an annual required minimum distribution (RMD) from their IRA can make these donations.

HOW DOES IT WORK? Donors contact their IRA custodian to request the contribution. The donation check is then sent directly to the IRT! These contributions result in a dollar-for-dollar reduction of the year’s RMD.

WHAT IS THE BENEFIT TO THE DONOR? Donors contributing from an IRA will not have to report the donated amount as income, and thus do not increase their annual adjusted gross income. This reduces federal and Indiana state income tax liabilities.

WHAT ELSE SHOULD I KNOW? Donors can contribute up to $100,000 per calendar year to qualified charities using this method. However, donors giving in this way cannot receive benefits that have a monetary value (for instance, complimentary tickets or parking). Before making a gift that may affect your taxes, please speak with your tax preparer. They are qualified to advise you on how a charitable contribution will affect your specific tax liability.
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