Year-end Giving Strategies to Consider

Make Qualified Charitable Distributions from an IRA:

  • A taxpayer aged 70½ or older who is required to take minimum IRA distributions and does not need the additional income may transfer up to $100,000 per year directly from their IRA to one or more qualified charitable organizations without incurring federal income tax. 
  • Transfer counts toward Required Minimum Distributions.
  • Avoid taxable distributions from an IRA in the year a charitable transfer is made.
  • Non-itemizers, who normally realize no tax benefit from charitable gifts, may reduce their taxable income by making charitable gifts with a charitable transfer from their IRA. 

Planning Tip for Naming Beneficiaries:

Are your children, grandchildren, and others currently listed as beneficiaries of your tax-deferred retirement plan?

If so, you should be aware that every dollar will be subject to income tax when withdrawn by your heirs. However, a charity that is beneficiary of your tax-deferred retirement plan can receive funds without paying any income tax. Almost any other asset you own will have already been taxed or will receive a step-up in tax basis when passed through your estate, so these can be transferred to your heirs with little if any income or capital gains tax.

Consult your tax advisor and consider alternatives before making your decision. We are happy to help you review your options.