News you can use: 3 benefits of donating your required IRA distributions to charity
As you may recall, last December President Obama signed into law the Protecting Americans from Tax Hikes (PATH) Act of 2015, which also made the charitable individual retirement account (IRA) rollover permanent. This provision allows IRA owners age 70 ½ or older to make a direct, tax-free transfer of up to $100,000 a year from their IRA to a public charity like Duke University.
This article featured in The Wall Street Journal explains why making a gift from your IRA directly to a charity is an excellent and tax efficient way to support an organization your care about. Older IRA owners who need to take their annual required minimum distributions (RMD) will benefit by taking advantage of the qualified charitable distribution rules.
An IRA rollover gift can offer several benefits to you:
- Reduce your taxable income.
- Count the donation toward your annual RMD.
- Use retirement assets to make an immediate gift to a charity or place you care about.