Is it possible to make a tax-deductible charitable contribution from your IRA?

In light of the upcoming National Day of Giving #GIVINGTUESDAY, here’s a question for you:  Is it possible to make a tax-deductible charitable contribution from your IRA?  Yes, it is!  If you are over 70½ years of age and have a Traditional IRA, then a Qualified Charitable Distribution (QCD) might be something to consider.  Here’s a bit of background:

• Once you reach age 70.5, the IRS forces you to take money out of your pre-tax accounts, even if you don’t want or need the money at that time.

• In the past, over 30% of US taxpayers itemized on their taxes. This means that they could deduct the value of their charitable gifts, which meant lower tax bills.

• In 2018, changes in the new tax bill made it so that only about 10% of taxpayers are now expected to itemize.

• For those charitable givers who no longer itemize, their charitable gifts are no longer tax-deductible.

If you are someone that gives money away each year to charities, then giving money directly from your pre-tax IRA allows you to avoid paying taxes on the amount given away, and the charity receives the full amount. It’s a win for you, and your charity of choice!

For 2019, you can donate up to $100k from your IRA to eligible charities. 

If you would like to talk further about how the QCD process works and whether it would make sense for you to consider, feel free to reach out anytime. Happy #GIVINGTUESDAY!