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Q & A about New IRA Rules

Give Your required minimum distribution (RMD) to Charity-Tax Free

Here is what you need to know.

How much can I give?

Retirees can now give up to $100,000 to charity tax-free from an IRA and have it count as their required minimum distribution for the year.

Can I give my RMD to charity now, or do I have to wait until December like I have in the past?

You can give your RMD to charity anytime during the year. Congress passed a law that permanently
extends the Qualified Charitable Distribution provision, so you can now transfer the money to charity
anytime during the year.

How much can I transfer from my IRA to charity? Can I transfer more than my RMD?

Yes, if you are 70½ or older, you can transfer up to $100,000 to charity tax-free each year — even if that’s
more than your RMD. The money counts as your required minimum distribution but isn’t included in your
adjusted gross income.

I’ll be 70½ in a few months. Can I give my RMD to charity now?

Even though you can take your RMD anytime during the year you turn age 70½ (or until April 1 of the
year after you turn 70½), you have to wait until you actually turn age 70½ to make the tax-free transfer
to charity. See Taking Your First Required Minimum Distribution for more information.

Can I give my 401(k) RMD to charity?

No. You can only make the tax-free transfer from an IRA, not from a 401(k).

Can to give my RMD to National Association of Veterans and Families?

Yes. NAVF is a 501c3 non-profit veteran service organization. Your donation helps all veterans from
WW II to veterans serving today.

Important! Can I withdraw the money from my IRA and then write a check to<br /> charity, or do I need to transfer the money directly?

The tax-free transfer will not count if you withdraw the money from the IRA first and then make a contribution to the charity. You can take a charitable deduction for your contribution in that case, but the IRA withdrawal will be included in your adjusted gross income.  You need to transfer the money directly from the IRA to the charity for it to count as the tax-free transfer.  Ask your IRA administrator and the charity about making a direct transfer, or you can have the IRA administrator send a check from your account to the charity. If you have check-writing privileges for your IRA, you can write a check to the charity. Call 904-394-3904 for more information about the procedures.

So which is better: the tax-free transfer or the charitable deduction?<br />

If you make a tax-free transfer from your IRA to charity, you can’t also deduct that money as a charitable
contribution. But the tax-free transfer could give you extra benefits. You don’t need to itemize your
deductions to get a tax benefit from the gift (and many people who no longer have a mortgage don’t itemize
their deductions). Making the tax-free transfer also keeps the money out of your adjusted gross income.
That could help you avoid the Medicare high-income surcharge, which boosts your Part B and Part D
premiums if your AGI is more than $85,000 if single or $170,000 if married filing jointly. Keeping the money
out of your AGI could also make less of your Social Security benefits taxable.

Help a Veteran and get tax-free transfer.

Don’t wait
until December

Contact Joe

Phone: 904-394-3904


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