Anyone 70½ years or older with a contributory IRA is required to withdraw a “minimum distribution” annually (“RMD”). The distribution is considered ordinary income and is taxed at your tax rate. The amount of RMD is calculated based on IRS guideline tables. Visit the IRS website for more info.
In 2006, the Pension Protection Act included a provision allowing taxpayers 70½ or older to transfer money from their IRA accounts directly to a charity without paying taxes on the distribution. In 2015, this provision was made permanent.
As long as you are 70½ or older, you can make an IRA Charitable Rollover (also called a “Qualified Charitable Distribution”) of up to $100,000 every year to a 501(c)(3) tax-exempt organization. If you’re married, your spouse can also contribute $100,000. The amount of distribution may exceed the RMD for the year.
The contribution must be sent directly from your IRA to the charity. With this charitable opportunity, you can meet your required minimum distribution, avoid paying taxes on the distribution, and help your favorite charitable organization. As always, check with your CPA or tax advisor.
To make an IRA Charitable Contribution to help people with Parkinson’s improve their speech and swallowing, direct your contribution to be sent to:
Parkinson Voice Project
646 North Coit Road, Suite 2250
Richardson, Texas 75080