Save money by changing the way you donate to charity!
You can avoid reporting IRA distributions as income. If you are 70 ½ and your charitable contributions come directly from your IRA, the distribution is not reported as income. However, you do not receive a deduction for donations of up to $100,000.
Tax savings for those who don’t itemize deductions:
Eliminate taxable income from IRA distributions that go directly to a charitable organization.
- If you write a check to a charity and don’t itemize, you don't get a deduction.
- If you have your IRA distribution go directly to the charity, the IRA distribution is not taxed.
Tax savings for higher income taxpayers:
Eliminate taxable income from IRA distributions that go directly to a charitable organization:
- Reduces your income to reduce the phase out of itemized deductions.
- The phase out reduces your charitable deduction, as well as all itemized deductions. - Reduces your income to reduce the phase out of personal exemptions.
- Reduces or avoids net investment income tax by not including your charitable IRA distributions in your income.
- Taxpayers who have income over $250,000
- Avoids the 3.8 net investment income tax - Reduce income to possibly avoid or reduce AMT (alternative minimum tax).
Tax savings for lower income taxpayers:
Eliminate taxable income from IRA distributions that go directly to a charitable organization:
- Reduces social security taxation for those taxpayers whose IRA distribution income could make their social security benefits taxable.
Call us at 724-942-3340 to discuss how strategies like this can benefit your tax and financial situation.