Give through IRA

If you are 70-and-a-half-years-old and you have an Individual Retirement Account (IRA), you are subject to the “required minimum distribution”.

If you contribute some or all of the required minimum distribution directly to a charity (like Liberty Church), it will not count as taxable income.  (“Directly” means having the funds transferred directly to Liberty without them going through your bank account).

While this type of donation does not count as taxable income, it cannot also be claimed as a tax deduction.

An example of the benefit:

  • Assume you have a 25% tax rate.
  • If you decided to give $6,000 to Renew in 2018-19 and paid it by check (all at once or periodically), you would need to withdraw $8,000 from your IRA to donate $6,000 to Liberty (the other $2,000 for taxes).
  • However, if you transferred $6,000 directly from your IRA to Liberty in 2018-2019 (all at once or periodically), you can meet part of your “required minimum distribution” and use the extra $2,000 for other purposes.

The maximum limit on this kind of giving is $100,000 per calendar year.

Please always consult your financial advisor in making your charitable gift decisions.