Did you know you can still get the benefit of a charitable deduction even if you don’t itemize? If you are taking required minimum distributions from an IRA and also make charitable contributions during the year, then you could benefit from doing a qualified charitable distribution.
A qualified charitable distribution is achieved by having your IRA distribution paid directly to a charitable organization by the trustee of your IRA and counts towards your Required Minimum Distribution.
The qualified charitable distribution is not included in your adjusted gross income which may also reduce the tax impact of other income and deductions, such as the amount of taxable social security benefits.
For those of you who itemize, you cannot claim the same charitable contribution as a deduction again on your Schedule A. However, you will receive the full benefit of the charitable contribution even if you don’t itemize.
You must be at least age 70 1/2 when the distribution is made. The maximum annual exclusion for a qualified charitable distribution is $100,000 so anything in excess would be included in income. If you file a joint return, your spouse can also make a qualified charitable distribution and exclude up to $100,000.
Are you still unsure of how this benefit can affect you? Reach out to an Alloy Silverstein advisor today!
Associate Partner
Kim has developed a primary focus on providing accounting, tax, and advisory services to the professional service area, including law firms and medical practices.
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