Charitable Distribution from Your IRA

Charitable Distribution from Your IRA

Due to the tax law changes implemented in 2018 that included a significant increase in the standard deduction, far fewer taxpayers are itemizing their deductions.  For most taxpayers who take the standard deduction, charitable contributions are not deductible.  However, if you are 70 1/2 or over, you may still be able to reduce your tax liability with charitable donations, even if you do not itemize.  To do so, you would elect to transfer all or part of your required minimum distribution directly to a qualified charitable organization.  To qualify, the funds must be transferred directly by the IRA trustee to the eligible charity. This would make the distribution NON-TAXABLE.

What is a qualified charitable distribution?
Generally, a qualified charitable distribution is an otherwise taxable distribution from an IRA (other than an ongoing SEP or SIMPLE IRA) owned by an individual who is age 70½ or over that is paid directly from the IRA to a qualified charity. See Pub. 590-B Distributions from Individual Retirement Arrangements (IRAs) for additional information.

You will still receive a 1099-R tax document, which must be provided to your tax preparer.

Colleen Minnich