Donate — from an IRA — and save

Donate — from an IRA — and save

The Internal Revenue Service requires retirees to take annual minimum distributions from individual retirement accounts (IRAs). In situations where clients don’t rely on that money for income, they may consider making a charitable donation with the proceeds.

IRA account owners must start taking required minimum distributions at age 70½, and report the distribution as taxable income.

A provision in the tax code allows retirees at age 70½ to make a tax-free donation of up to $100,000 annually to a qualifying charity, provided the distribution is made directly to the charity. Distributions excluded from income are equivalent to a 100% deduction.

To determine whether making a charitable donation is right for your client, share the following investor education article, “Donating IRA assets to charity.” It is important for clients to discuss the strategy with their financial advisor or a tax expert before making the decision.


More in: Retirement/Income, Taxes