1500 SW First Avenue, Suite 990

Portland, OR 97201

503.292.2775

Interested in

learning more?

Let's talk.

HW_horizontal_white.gif
  • Facebook - White Circle
  • Twitter - White Circle
  • LinkedIn - White Circle

© 2019 Hines Warner A Vista Wealth Management Company.  All rights reserved.

Charitable Giving From Your IRA

March 16, 2016

 

If you are charitably inclined, it may be beneficial to make your donations directly from your Individual Retirement Account instead of giving cash to charities from other accounts.  At the end of 2015, Congress extended and made permanent a provision allowing "qualified charitable distributions" from IRAs.  This allows taxpayers who are 70 1/2 or older to rely on this charitable planning strategy moving forward.  The maximum allowed distribution is $100,000 per year, and funds must be transferred directly from the IRA to the charity in order to qualify under the provision.  

 

The primary benefit of making qualified charitable distributions from an IRA is that these withdrawals can be used to meet the donor's annual required minimum distribution.  After age 70 1/2, retirees are required to distribute a percentage of their traditional IRA account balances each year, exposing those funds to taxes.  Over time, taxes take a bigger and bigger bite out of retirement assets. With a qualified charitable distribution, the gift can fulfill the annual required withdrawal, but the funds are not included in calculating the donor's adjusted gross income (AGI).  This can potentially avoid the loss of exemptions, deductions, credits and phaseouts, the alternative minimum tax, the 3.8% surtax on net investment income, and the increase in Social Security premiums for Medicare Part B and Part D.   In short: gifting to charity directly from your IRA can be more tax-effective than giving the same amount from outside of your IRA. 

 

 

See Disclosures.

 

 

Please reload

Popular Posts

September 13, 2016

Please reload

Categories
Please reload