If you are 70½ or older, rather than simply take your withdrawal this year, you can direct your IRA administrator to distribute a gift from your IRA to a 501(c)3 charity. Any amount you transfer counts against your required minimum distribution (RMD), but does not increase your income. You can direct up to $100,000 to your favorite charitable causes this year.

Three Reasons for Making a Rollover Gift

1) If you take the standard deduction on your income taxes and make charitable gifts, you receive no tax benefit on an outright gift. In effect, you pay taxes on your charitable gifts.

2) Donors who do itemize deductions can reduce their taxable income and may even be able to switch to the standard deduction if it is greater than their itemized deductions.

3) Making an IRA rollover gift may reduce your provisional income under Social Security (and thereby reduce income tax that might otherwise be required on Social Security benefits). You might want to check with your tax advisor to see if this situation affects your taxes.

Making an IRA rollover gift is very easy. Contact your IRA administrator. Because of the popularity of the rollover, most administrators provide forms and a convenient procedure to help you make a rollover gift.

If you have questions, give us a call.


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